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May 26, 2022

2011 – Looking ahead

According to the Chinese calendar, the Year of the Rabbit will begin on February 3, 2011 – a year dominated by metal elements, which is said to be a year of apparent peace. Astrologers claim that 2011 will be a common and usual year, with transparent events, logical and easy to understand. In fact, from the very first months of 2011 we might realize that problems did not disappear. ‘Experts’ also say that the new year might bring sudden changes, abrupt ups and downs, financial and social tremors; 2011 has a dual nature, as it can be either complex and dramatic, or simple and constant. Now, at the end of 2010, things look rather bad for Romania. In Europe, the fears of France and Germany led to a delay of the country’s accession to the Schengen Zone. In a letter sent to the European Commissioner for Home Affairs, Cecilia Malmstrom, the Foreign ministers of France and Germany wrote that an accession in March 2011 would be “premature.”

To sweeten the sour pill, the deputy head of the Social group in the European Parliament, Hannes Swoboda blames France and Germany for acting “unilaterally,” instead of having a closer cooperation with Romania and Bulgaria. “If it does not occur in March, it may happen in October, half a year later. It would be a reasonable target. If March is not accepted by all countries, then October should be the next target,” Swoboda said. The reaction of President Traian Basescu, who rushed to label the letter of the French and German ministers as an act of discrimination against Romania, seems to have been aimed at the Romanian public, which becomes very sensitive when it comes to the European evolution of the country.

If 2011 will bring uncertain prospects with this regard, things are similar when it comes to how Bucharest uses the European funds made available by Brussels. Statistics for 2010 show we ranked last in the EU, in terms of using European money, and there is no sign of a radical improvement next year.
Coming to local politics, things will likely be under tension in 2011. For the Emil Boc Cabinet, the accession to Schengen area would have probably been one of its few achievements, at a moment when its popularity sunk to a dramatic low. The ruling coalition will further withstand the attacks of a virulent opposition that wages an all-out war against the Boc Cabinet and President Traian Basescu. In fact, opposition parties make no secret of their wish to topple the government next spring, or at the earliest convenience.

In 2011 too, the acting Cabinet will have to deal with serious problems. The anticipated economic growth of 1.5 pc of the GDP will not be able to reverse the current trend. The government will have to lay off more personnel from the public sector and further curb spending, in order to match the budget deficit target agreed with the IMF. The expected ‘precautionary agreement’ with the financial institution of Washington will be aimed at the general stability, without immediate benefits. Next year too, authorities will have to borrow money, so they can pay their financial obligations at home – including salaries and pensions.
Restrictive financial policies will continue to affect the population, after the VAT increase from 19 to 24 pc in 2010. Enforcing the co-payment in the health sector, closing down hospitals, and lowering the compensation level of medical treatments will be hard to endure by the average Romanian, while also eroding what’s left of the popularity of the Emil Boc Cabinet. As things are now, passing the new Labour Code in a formula that will make life even tougher for employees will not appease the social unrest. On the contrary! Thus, a radicalisation of protests staged by trade unions should be expected. It is however still unclear whether union leaders will be able to cooperate well with each other, turning trade unions into an important opponent of the Executive, unlike in 2010, when they were unable to gather the expected number of participants for their protests.

In their turn, parties will suffer from infighting, next year too, especially as 2011 is a pre-election year. PDL will elect its leadership in a congress next spring, and many believe acting party leader Emil Boc will no longer run for a new term in office, leaving the place open to disputes by rival factions. In its turn, UDMR will run into problems when Laszlo Tokes will create a new party of the Hungarian ethnic minority. Furthermore, the decision made by UDMR acting leader Marko Bela not to run for a new term already gave the signal for a tough competition in the Hungarian ethnic party. In the Opposition, Liberal leader Crin Antonescu must preserve the high popularity he enjoys, in view of next years’ elections. On the other hand, PSD leader Victor Ponta has to improve his image, hence the complicate game of the relations between PNL, PSD and Conservatives. Each party tries to keep its own identity, while not severing its ties with its partners. As things are now, none of the Opposition parties is able to achieve majority in Parliament, so the game of alliances stays open…

Thus, 2011 seems to be a year of political and social challenges, but the economic aspects will prevail. According to experts, Romania is still unable to overcome the downturn, for some time. By curbing the public spending, authorities also have cut the investments in economy, with repercussions in the economic activity. The general level of confidence has decreased throughout the economy, as well as foreign investments. Monetary stability was unaltered in 2010 and will probably remain the same in 2011 too. It may represent the prerequisite of economic recovery, something absolutely necessary, but not sufficient.

In this context, should we expect 2011 to be a dramatic, or a simple and constant year?

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