The tensed political situation in Romania as a result of the Government’s decision to adopt the law bill on the pardon of certain deeds, and on amending the criminal codes through GEOs, caused large street protests starting from Tuesday night, but it also had an impact on the financial markets, triggering the investors’ concern.
More than 15,000 people gathered in front of the Government on Tuesday evening, some of them even forcing the fence of the Government, and gendarmes used tear gas. Protests continued also on Wednesday in Victoriei Square and in several cities in the country, thousands of people expressing their anger and indignation against the amendments of the criminal laws through GEO.
According to spokesman of the Bucharest Traffic Police Ovidiu Munteanu the crowd keeps rising; at 19:30 hrs an estimated 40,000 people had gathered before the Government offices.
Other major cities including Iasi (over 4,000), Cluj (over 10,000), Sibiu (over 7,000) and Timisoara (over 6,000) drummed up on social media support for the nationwide protest sparked Tuesday night against the law which would decriminalize abuse of office.
On Wednesday, the LEU lost 1% of its value on the foreign exchange market, reaching quotations close to RON 4.55/Euro, unprecedented since June, 2013. Analysts deem that the responsibility for this evolution belongs to the protests caused by the Government’s approval of the GEO amending the criminal codes.
Around 15.00 o’clock, Euro was quoted at RON 4.5470, an unprecedented level since June, 2013, and was on a descendent trend. Compared to the Tuesday’s closing level, the national currency lost on Wednesday 1% of its value. At 13.00 o’clock, National Bank of Romania (BNR) announced a reference rate of RON 4.5240/Euro, up by 0.45% from the level of the previous session and the maximum level since December, 2016. On Tuesday, BNR displayed a rate of RON 4.5038/Euro.
Investors have also expressed their concern related to the events in Romania. “Local currency has depreciated from the first transactions, being affected by the street protests against the GEO reducing the punishments for several corruption deeds”, shows a report made by Credit Europe Bank, published on Wednesday. US Dollar, indirectly quoted on the Romanian market by relating it to the Euro/Dollar parity, has depreciated from RON 4.2072 to RON 4.1935. US Dollar is the international reference currency for raw materials, including oil, and imports from Asia also depend on the US currency, according to news.ro. The exchange rate of the Swiss Franc has increased from RON 4.2267 to RON 4.2350.
AHK Romania cautions of possible negative impact of Criminal Code amendments on Romania – Germany economic relations
The Romanian – German Chamber of Commerce and Industry (AHK Romania) fears that the amendments to the Criminal Code adopted on Tuesday will have a negative impact on Romania – Germany bilateral economic relations and are sending a signal of insecurity among German investors.
“In the opinion of German companies running business in Romania, the changes operated yesterday by emergency ordinance to the Criminal Code and the Criminal Procedure Code put into question the new Government’s resolve to continue without compromise the fight against corruption. A limitation of the rule of law and the danger to see corruption reemerge will obviously have negative effects on the country’s economic development. These actions send a strong signal of insecurity among German investors and can negatively influence the tight economic relations between Romania and Germany,” AHK Romania said in a release on Wednesday.
According to the representatives of German investors, Romania risks losing the hard-earned positive image regained in the past year.
“This is all the more regrettable as Romania thus weakens its position as a stable and reliable place to invest, particularly in the delicate current global political context,” the release reads.
RBL Community: The Government attacks the rule of law’s principles in Romania
“For the first time since December, 1989 until today, the principle according to which ‘nobody is above the law’ is publicly violated, totally and unequivocally, by the current Romanian Government itself. The GEO no.13/2017 literally issued in the dark, in the night of Tuesday, January 31, legislates the immunity for abuse of office, including as theft of public money”, states a press release issued on Wednesday by the Romanian Business Leaders Community (RBL).
“Also, the bill related to the pardon of the sentenced persons and to the exemption from liability of the defendants who are party members, under a humanitarian pretext, is seriously affecting a decade of fight against corruption and against unfair competition and legitimizes the restoration of the infamous ‘crony capitalism’ that held up the Romanian society and economy for two decades.
Romanian Business Leaders Community, whose foundation was established in 2011, consisting in Romanian entrepreneurs and CEOs who believe that nothing healthy can be built in the society and economy without moral integrity, is appalled by the unprecedented attack against the rule of law’s principles done by the current Romanian Government. We appreciate that even questioning the fundamental principle ‘nobody is above the law’ is unacceptable, not to speak about its flagrant violation and the breach of the moral fundamental norms – DO NOT STEAL” the RBL press release also shows.
“The stake of breaching this principle is not economical, it’s not only about damages of billions of Euros of public money; it’s not only about underfunding hospitals, schools and national road infrastructure; it’s about what kind of country we want to build. A country in which theft, hided under the benign name of abuse of office, is transformed in rule even by the leaders, or a country in which respect for life, work and people’s money, for equality in front of law, prevails over the historical trend of the cross party mafia, coagulated since 1989 until today, to confiscate Romania.
RBL Community propose to all the professional and business organizations in good faith to join us in order to find common, legal solutions for defending the rule of law principles, a healthy society and a free market” states the RBL document.