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January 26, 2022

Iohannis’ decision to return Fiscal Code for reconsideration dissected by commentators

President Iohannis’ decision to send the Fiscal Code back to Parliament to be reconsidered, which has become a reason of new tension between Victoria and Cotroceni Palaces is now being dissected by analysts who cannot help noting the paradoxical situation of the National Liberal Party that, on the one hand, voted for the new Fiscal Code in unanimity in Parliament, claiming PM Ponta and PSAD had copied the measures from its own ruling programme and, on the other hand, are now denouncing the same Fiscal Code in order to support the position of the president who has rejected it.

President Klaus Iohannis has done something not even the Liberals would have expected: he did not promulgate the Fiscal Code although only one PNL MP had voted against the bill, all the rest supporting the law proposed by Victor Ponta. Dan Andronic believes Klaus Iohannis’ move could stand for the beginning of the end as far as he is concerned and that it may be Victor Ponta’s salvation, stiripesurse.ro notes.


Dan Andronic: A specifically Romanian paradox


‘A specifically Romanian paradox: a right-wing president opposes the tax cuts promoted by a left-wing prime-minister’, Dan Andronic writes in Evenimentul Zilei (EVZ).

‘I could accept this position, if the economic situation around us was not the one we see every day on the news programmes. I do not mean Greece, I mean another country that has decided to move to tax relations – Italy. Yesterday, Premier Mario Renzi announced massive tax cuts for next year. Other European countries will follow. A whole European economic philosophy seems to be taking shape, and we are in the phase of low blows. We are worried about 1% deficit in a European Union that doesn’t comply with its commitments at all!

I would equally take the side of the Liberals who now say they support President Iohannis decision to decline the Fiscal Code. The only problem is that Vasile Blaga has told us that the draft law on the Fiscal Code had been analysed by the PNL unification commission on 22 June: <We have been able to see that Mr. Ponta and his colleagues have carefully read PNL’s ruling programme. There is just one topic still pending on the Chamber of Deputies Committee – the reduced VAT rate and enforcement date. Mr. Ponta was deriding the proposal of the National Liberal Party to introduce 19% VAT on 1 January 2016 and a VAT equal to the flat tax – 16%, as of 1 January 2018. Do you remember that Ponta was proposing a reduced 20% rate in April, then he changed his mind? He has now come to our proposal – 19% vat ON 1 January 2016. For this reason, PNL will support the Fiscal Code draft law. Of course, we regret the fact that the Ponta Government has not found the arguments to convince the International Monetary Fund and the European Commission of the necessity of these measures>. But they have actually done that in the meantime’, Dan Andronic further states.


Ion Cristoiu: ‘He expects us to punch new holes in the belt, but, for him and his wife, he wants luxury’


Ion Cristoiu is also launching a new extreme attack on Klaus Iohannis and his wife, Carmen Iohannis. The journalist says that, whilst the president expects Romanians to punch new holes in the belt, by sending the Fiscal Code back to Parliament, he and his wife benefit from luxury.

‘President Klaus Iohannis has rejected the Fiscal Code, a law adopted by Parliament almost in unanimity, commended by business people and economists. Not to mention that the document was also happily received by the Romanian people, impoverished by the previous austerity’, Cristoiu states.

‘Everywhere in the civilised world, when the rulers ask the people to punch new holes in the belt, they start by their own example’, the journalist also writes. He notes that, since he came to power, Iohannis has only given the opposite example.

‘(…) He has asked the Government to triple his wage ahead of the rest of the civil service. When Victor Ponta declined his request, he became extremely angry. Klaus Iohannis rejected the Fiscal Code with the argument that it fosters a pay rise in the public sector without budget support. On the other hand, when he had asked the Government to triple his salary, he did not wonder about the budget support.

He has asked RAPPS to turn his Vila Lac 2 into a Romanian Versailles. A president – Traian Basescu, lived in Vila Lac 2 for ten years. Apart from the fact that he was voted – to quote the covert officers – by the miracle of 16 November, Klaus Iohannis is as much a president as his predecessor. Like Traian Basescu, he, too, has one wife. Then why did he need one million euro already in order to move to Vila Lac 2 together with his wife? When he asked for a 200 square metre bedroom, didn’t he think it may be a reckless public expenditure?

During the six months since his installation to Cotroceni, Klaus Iohannis and the wife have voyaged abroad more than Traian Basescu had done in a while term. His trips were absolutely useless, as most of them were to EU countries. The head of state systematically meets with EU presidents and prime-ministers during the Council meetings. Why did he take those voyages? What do you mean why? To give Carmen Iohannis the chance to show her top level ceremony outfits. What? Do you expect her to wear those to the Sibiu high school?

Do all these trips mean reckless public endings? They do’, Ion Cristoiu says.

‘Ever since his installation, Klaus Iohannis has scored a few premieres. He has replaced the car of the president with a much more luxurious one, had the presidential plane land in Sibiu to pick him and the wife up right from their dining room, held his birthday party at the luxury mention in Neptun. By the looks of it, Klaus Iohannis expects Romanians to scale down their expenses whilst he does the opposite’, Ion Cristoiu states on his blog.


Iulian Anghel, Ziarul Financiar: President Iohannis’ first major decision, first major mistake 


‘President Klaus Iohannis judges the impartiality required by the Constitution, in his case, in a suis-generis manner: he remains silent and then, when you least expect, he slaps you. Mr. Iohannis is, indeed, a different kind of president, as he promised.

The president has sent back to Parliament the Fiscal Code law with the well-known arguments: there is no money to fill the budget hole left behind by cutting the value-added tax from 24% to 19%.

Accusing the president of dancing to the music of foreign occult interests who want to keep Romania in the dark, by his decision, as PM Victor Ponta was saying, is out of any commons sense discussion.

‘The Fiscal Code law was voted in Parliament by over 99% MPs – not even Ceausescu was voted by such a majority at the time.

It is also not to be commented if the 99% of the MPs were right or wrong.

The objections to the size of the fiscal cuts came from the Fiscal Council months ago. They have also come from the IMF and the European Commission. From the Central Bank over the recent weeks. I am not revisiting them, as they are very well known. If so many people who know what they are talking about say: Be careful! you need to be careful.

Wasn’t the Parliament aware of the objections? It was. Yet, it adopted the Fiscal Code by 99% votes.

Why? (…)’ the author further wonders.

‘For months the presidential been missing from the debate. There are boundaries for the presidential intervention in public life, but not to such an extent that he should be completely absent.

The president had dozens of opportunities to bring up the Fiscal Code. To have an indirect intervention by, for instance, praising the good performance of the economy whilst warning that a much to tighten cord inevitably gives in.

He hadn’t done t for months, just to say, with an unjustified superiority, at BNR, on Monday: <I am not sure how the appreciation that this fiscal code would revolutionise Romania’s finances by the mere reduction of taxes had crept in’.

How do you address to such a leader? Mr. Iohannis or Mr. Ramesses II?’ the ZF analyst rhetorically asks.

‘Where was the president during the debate on the good and bad sides of a VAT cut, on whether the reduction of S contributions or perhaps a combination would be better?

The presidential constitutional role is to cause such public debates. It is difficult for the party of the president, a liberal party, to oppose tax cuts, because that would be against its doctrine. However, the argument of scarce resources would have been solid enough and sufficient for a non-political debate.

It is perhaps a good thing that the president has returned the Fiscal Code law to Parliament. We get a bit more time to think. But the best thing would have been to step in on time, if he had any objections.

The role of the president of Romania is to mediate, not to be a straw man.

The economic policies are done by a government and a parliament, not the Central Bank or the IMF. If it’s different, it means we no longer need a government and a parliament. Anyway, many of us think they cost us too much’, is the author’s conclusion.



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