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May 24, 2022

Disputable legal initiatives

Banks and their clients are on the verge of war. Ordinance 50 was meant to be a reparatory act that would bring order and discipline in this very sensitive sector. As usually, authorities drafted it with paper, pen, but no brain. The government did not take into account all the possibilities, plus a number of momentary or general impossibilities. So, the client vs. bank dispute got acute and reached a very delicate moment – at both individual and general/social scale. As it was issued, the ordinance is at least amendable. Maybe the mistake would be easier to understand or forgive, if authorities were at their first serious omission. Just two months ago, the law on the contributions to the public welfare system and the pension fund left a lot of people wondering about what they should do. Its author: the Ministry of Finance. So complicate and “subtle” it was that, when its enforcement norms were issued, the law became… inapplicable.

Thousands of people queued at the state’s pay offices (also those of the public Health system) and the ministry had to revise everything. From now on, after Government Emergency Ordinance 58/2010 became effective on September 10, it is employers who must pay all due taxes. Even now things are still partly unclear and – most likely – the real trouble will appear when financial inspectors will find a few “bad payers” and fine them, no matter if they are right or wrong.

And the odyssey of the two laws is going on. Yesterday, leasing companies sent the Chamber of Deputies a letter in which they threaten to leave the market, if the government does not modify Ordinance 50. The reason for this protest: the “very high” protection level granted to consumers.

“We warn the distinguished representatives and members of the Chamber of Deputies that a very high level of protection granted to credit consumers may even result in consumers being totally protected from the possibility of taking a loan, as financial institutions will focus upon other products, or even other states with a more flexible legal system,” reads the document signed by the secretary general of ALB, Adriana Ahciarliu, quoted by Hotnews. The changes suggested by bankers to Ordinance 50/2010 will be analysed next week by the pertinent Committee of the Chamber of Deputies – which is the decision maker in this case. The ordinance opens a chapter that will put both banks and clients at a loss. As things are now, banks rely upon their financial power and skilled lawyers (if necessary), while clients rely upon their high numbers. It is such thorny and hard to solve issues that negate the good intentions of the ordinance. These “legal initiatives” are not the only decisions that missed their target. Yesterday, the Constitutional Court was expected to give a verdict on the Pension Law, passed by the Chamber Deputies in a vote challenged by the Opposition as fraudulent by lack of quorum, verdict postponed until October 6. And the list may go on.
The matter of disputable initiatives is so complex that one might speculate that it belongs to the Romanian “gene.” Because of incompetence, wish to impress, or simply obedience, the power comes with flawed regulations. Also the Opposition and the Parliament. Apparently, the present crisis acts as a stimulant for hotheads, to come with absurd initiatives.

Recently, on a private television, Social-Democrat leader Victor Ponta unveiled his vision on the tax system. He has in mind taxes from 0 to 25 or 35 pc, even 40 pc for those who earn more than RON 10,000 a month. In today’s context, his project seems very populist, drawn out to attract voters. The economic crisis pushed many people to their limits. Obviously, those who earn little will be tempted to support this initiative, instead of the current flat tax. The results, however, might be contrary to what was intended. Tax evasion is already high. Things might return to the situation before the victory – in the 2004 elections – of the ‘DA’ Alliance which enforced the flat tax, when evasion was even higher. The incomes to the state budget would rapidly decrease, if only the wealthier segment of employees paid the income tax. To say nothing about the higher number of people working “on the black market.”

But the disputable legal initiatives are common to all political parties. An example is the “Journalist’s Law” announced Tuesday by Liberal Senator Ioan Ghise. The act does not enjoy the support of his party, but this is irrelevant. Mr. Ghise (who came with other absurd suggestions in the past, like using Central Bank’s reserves to pay public salaries and pensions, or forcing the media to report an equal number of positive and negative deeds) drafted more than a law, actually a whole code of conduct. Under his draft act, journalists will need “journalist permits”, they will be grouped in “journalist cabinets,” will pass a professional examination every three years and a psychological exam each year (!), while “press crimes” will be sanctioned, ‘Adevarul’ newspaper reports. Furthermore, Ghise also wants to create an institution – called the Media Ombudsman – that will supervise and sanction press offenses and even suspend the journalists who commit one…

When it comes to laws and enforcement norms, state institutions are not very good at doing their duty. In a time of crisis, when living standards are on a constant decline and social unrest becomes unavoidable, enforcing a rushed law can be very harmful. On the other hand, we cannot stop from noticing that the future statesmen – now in the opposition – are not very different from those who are holding the power now. They, too, have strange legal ideas. The difference is that opposition politicians can only speak now. On the other hand, the politicians of the power – plus their numerous advisors who earn high salaries, but know very little – can enforce laws that pose problems to everybody. And nobody takes responsibility for a catastrophic law.

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