ECONOMY FINANCE&BANKING POLITICS

PM Tudose: We must recoup nearly a year and a half of nothing; things are looking up

The vaccination law and the one capping child raising indemnities might be adopted on Thursday by the Government, if they have all the necessary paperwork, said Prime Minister Mihai Tudose, in an interview granted to AGERPRES.

The head of the executive speaks also of the possibility that part of the acquisitions for the Army be done with the aid of the national defence industry, but also of acquisitions for emergency situations inspectorates, the Prime Minister pleading for the integral makeover of the intervention system.

“We have renounced the 15 million euro [appropriation], because we considered it’s not good to patch things up again. (…) I asked a question (…) [Raed] Arafat [head of the Emergency Situations Department] told me a figure – 600 million euro, nearly 800 if we take it step by step. And we found the money,” said Tudose.

In the interview, the head of the Government also speaks of the budgetary execution in the first semester, about fiscal measures, about special pensions, but also of his relation with Romanian President Klaus Iohannis and Social Democrat Party (PSD) chairman Liviu Dragnea.

Tudose said that “a new political project within the party” has no chances of success.

The Prime Minister also spoke of the searches conducted at the Government by the National Anticorruption Directorate (DNA).

 

Mr. Prime Minister, let us start with a recent subject, the searches conducted on Monday at the Government headquarters.

 

I understood that Mr. Minister [for the relation with Parliament] Viorel Ilie issued a release, the DNA in turn issued a release, the National Anticorruption Directorate will tell you more when they’re done. That’s what I understood from the DNA release.

 

Is it a image problem for the Government? The Minister for the relation with Parliament has his headquarters in Victoria Palace [e.n. – the seat of the Government].

 

I don’t know more, I understand that two people there did something or are suspects for doing something. We await the conclusions.

 

The CSAT [Supreme Council for the Country’s Defence] has met in order to approve the Acquisition Plan for the Army. What plans do you have in view of revitalizing the Defence industry?

 

The defence industry is a sensitive domain and we considered it, both when I was Economy Minister, and now, as being a domain through which the Romanian economy could revitalize. And results were obtained. It is in a complete process of reorganization and it has major investments and, yes, it’s deeply connected to the Army acquisitions, because we are trying to have as many of the Army’s acquisitions as possible be made in Romania or have components from Romania as well. Mr. Minister Fifor has now taken over what I started in 2017. There’s a lot of good indicators.

 

How do you see th recent threats made by Russian officials towards Romania? Moscow’s Ambassador to Bucharest has again voiced his concern and said that the [anti-missile] system in Deveselu would be a “potential risk” that Russia cannot ignore.

 

I understand. Nothing new. He’s been saying it for quite a while now.

 

And the recent threats made by Russian Deputy Prime Minister Dmitry Rogozin?

 

I don’t know what that’s about. Mr. Rogozin made some comments… We’d answer and suddenly be in dialogue with him then. He’s got his business, we’re minding our own.

 

You meet in the CSAT with President Iohannis. It seems that you have a good cohabitation. Did you discuss with the head of state?

 

He’s the chair of the CSAT, he’s the President of Romania. (…) Yes, we’ve discussed over the phone. We discussed Moldova, when I was in Moldova. I informed him on every foreign visit. A normal, institutional relation.

 

When you took over your mandate, President Iohannis had a harsher speech and asked you to renounce “the fiscal prancing about”. Did you have discussions on fiscality as well?

 

No, he stuck to common interest matters on the public and non-public agenda. I say again, [we talked] in what regards Brussels, in what regards Moldova, with no other implication in what regards the fiscal policy of the Government. But, you know, that was then… we had to answer to something we didn’t do or didn’t want to do, but to accusations coming even from the press, that we want to take I don’t know what, the sugar from someone’s tea. It didn’t happen.

 

You renounced the tax on turnover, the solidarity tax. What modifications do you have in view for the fiscal domain and when could they be applied?

 

We have no other modifications aside from those which were announced and which are scheduled and will follow that schedule.

 

Are you referring CAS and CASS [e.n. – pension and social security contributions, respectively]?

 

CAS and CASS, starting next year. My colleagues are working on the normative act.

 

There were fears that the average wage after tax will decrease. Are they justified, especially given that the wages of state employees are supposed to increase by 25 percent starting with January 2018?

 

They will increase.

 

By 25 percent?

 

The wages of state employees will increase. Fears appear. We keep answering questions like these from people who hear voices. Forgive me, medicine has progressed sufficiently to treat these things.

 

The budgetary execution in the first semester is not very good.

 

It isn’t, it’s true. This was one of the reasons for which the PSD ousted its own Government. I say again, we found a ministry with a budgetary execution of 2 percent. The Ministry for Information Society – 2 percent budgetary execution over six months. Absolutely unforgivable. Proof is the fact that the new minister, Mr. Minister Sova, in one month nearly recuperated the gap simply by working and dedicating himself to the activity there.

 

Beside this ministry, are there problems in other ministries? Can you give us a few examples?

 

There were pretty large problems in other ministries too. Now, being a bit more revved up, things are looking up. (…) I wouldn’t want to wrong anyone, but there are ministries that have made spectacular comebacks, for example in the IT area. In Finance, things are moving very well. Last month was the first month of this year in which the ANAF [National Tax Administration Authority] met its [collection] plan, the plan being rather large too. And not only did it fulfill its collection indicators, they were exceeded. The Ministry of European Funds – finally, after six months of stagnation, things started moving along, in this regard also due to the fact that we [e.n. – the PSD] took over governing on the backdrop of a total cessation. There was no authorized management authority, no project. Absorption in 2016 we all know how large it was – 0.3, so some absolutely fabulous sums. So, we left off with a huge handicap in this battle, but we are recuperating and we are reaching our target for 5.2 billion. I am even optimistic that we will exceed it.

 

You are very pleased with the activity in the European fund domain of the Minister of Agriculture. But in other domains?

 

Other domains too, but this one was a priority and essential for Romania. The activity of Mr. Minister Daea in the area of European funds – it was our money, they could be drawn. Mr. Daea was the champion of Europe – I know that, until the end of January, beginning of February, Romania, through the Ministry of Agriculture, had drawn more money than all of Europe put together, which is notable and worthy of commendation. And believe me, he hasn’t “calmed” down yet, he has successes every day, bigger or smaller, but continuous.

 

Mr. Daea is not going to be on the list of ministers to be removed?

 

Pardon me, do we have to remove someone because he says I don’t know what in the public space?

 

You have harsh words to address to ministers, at the beginning of Government sittings, after which you attenuate them.

 

Not towards the ministers and they are not harsh words. What do you want? We have a problem. We cannot resolve it unless we admit it and put it to public debate. What makes me a bit harsh is the fact that it’s like nobody’s seen it until now and nobody took care of it and I don’t understand how we ended up having 250,000 children unvaccinated, or to speak in August about the school manuals to be used in September and so forth. Excuse me, maybe I’m exaggerating or maybe it’s not necessarily very diplomatic, but it has to be said – we must recuperate some months or nearly a year and a half of nothing.

 

You said that currently the conditions in Romania would impose mandatory vaccination, but does the legislation impose it?

 

There are countries that are trying exactly the same thing now, to impose mandatory vaccination. I believe that at the moment all good options are exhausted, all measures to raise the awareness of the risks that the unvaccinated child has – [the parent] who practically convicts his child to suffering, and not only the child, but the community he is part of, then the state is obligated to intervene. Because it’s not the child who decides, somebody decides for the child. And then, he must assume the mistake of the parents? Thus, if the state protects and intervenes over the parents when he is badly treated for a cold or something else, then, forgive me, but in this area we will have to be more active.

 

When will the Government adopt the vaccination law?

 

It might happen Thursday, if it has all the necessary paperwork and all the other colleagues – because it has a juridical component to it – agree, we will promote Thursday.

 

A potential medicine crisis is on the horizon, over 600 drugs have been withdrawn from the market.

 

I will have next week, I’m trying, a meeting with producers, importers, distributors, everyone, together with the Finance Minister to see what is happening. Exactly as I said, let’s identify the problem. Once identified, let’s all discuss it and try to solve it.

 

Another issue you raised was the equipment for emergency situations. You asked the Finance Minister to find you 15 million euro for the [budget] amendment to be used on equipment. Did he find the money?

 

Yes, only we’ve renounced the 15 million euro, because we considered that it’s not good to patch things up again. With 15 million we would be patching up. Later, I had a discussion with the Interior Minister, with State Secretary Dr. Raed Arafat and I asked a question: how much would we need, what would be the cost to redo or have an ideal system, everything needed in order to do it – from the human factor to the material factor. Absolutely everything. He told me a figure – 600 million, nearly 800 if we take it step by step. And we found the money, it’s European money and we’re starting to run the projects. Otherwise, again I say, we’d just be patching up. Two bucks today, two bucks next year, every time we’d finish, we’d reach an end for what we started, it would be broken again.

 

Then we should expect the budget amendment to show more money going to investments?

 

Yes, the money for investments is there to stay. (…) We have money for pensions, we have money for salaries, we have money for investments.

 

What don’t you have money for? You’re very optimistic.

 

I am not optimistic. The budget is within the figures it started off with. We are recuperating in fact, but we’re on the right path. I told you that since last month things are starting to look up a bit.

 

The opposition is saying that the amendment will see money cut from Education. Will you have enough money for all the plans of the Education Minister, including the acquisitions for physical education manuals and ‘dirigentie’ manuals? [e.n. – ‘dirigentie’ refers to a course held in the Romanian pre-university education system by a head teacher, who bears responsibility for a class, where the students’ educational progress is discussed; its frequency and length is one hour per week] .

 

The opposition, I’m sorry, but I can’t understand it lately. When you come as a representative of the opposition and say that from July onward there will be no money left for pensions and salaries, I don’t know how much good you’re doing to the country. As proof, look, we have it and we’re not rushing the budget amendment either. It’s one more sign that things are alright. (…) There was a statement today from a representative of the opposition, a member of the European Parliament. I will try to have a discussion with his party. Romania is making extraordinary efforts to move to Bucharest the European Medicines Agency. We have found a headquarters, the documentation has been submitted, we are trying to lobby. A Romanian MEP says that the headquarters is no good, that it’s a mockery and that the mentioned Agency can’t move from London to Bucharest because the Romanian Government wants it. He’s Romanian. I won’t name him, I’m ashamed, he’s not worth mentioning.

 

Do you wish to discuss with him?

 

I don’t wish to discuss with him, but I will have a discussion with his party leaders. I understand, we’re all Romanian, he represents Romania there. I understand political statements, the fact that he doesn’t like someone or how someone acts is something else. But when through his actions he brings Romania grave disservice, maybe somebody gives him a check-up, I don’t know.

 

Returning to investments and companies. What are the Government’s intentions regarding the Memorandum with KazMunayGas?

 

There is a commission. The Ministry of Justice and the Ministry of Economy are working. When we have a conclusion, we will present it.

 

What is the status of the package of laws regarding Justice? You recently announced that the Justice Minister will make frequent visits to Brussels.

 

Yes, Mr. Toader was in Brussels, he came back. There will be a new series of consultations, following his visit in Brussels, with the relevant authorities in the country.

 

Until autumn?

 

When it will be done, it will be done. We don’t have a deadline.

 

Did you discuss with the Justice Minister about the abuse of office and the frequently invoked threshold?

 

No.

 

You said that military pensions have caused “hemorrhages” in the system. Do you want to take away the money for the “luxury” pensioners?

 

We’re not taking away pensions. You can’t modify pensions that are currently paid out. But, let’s at least stop it for the future. You can’t retire with a pension bigger than the wage you had. Such a thing is incredible, that it has come to this. We must stop this. If you find it normal to retire at 40 from the system and to do so with a pension that is larger than your wage and then come back to the system as a civilian, forgive me, I don’t find it OK.

 

Will the pensions of magistrates be the subject of another draft law?

 

For the moment, we are speaking of military pensions. Regulating everything that means occupational pensions is difficult, due to the fact that for some it’s [calculated from] the gross wage, for some from the net wage, some have contributed [to the public pension system], others haven’t. It’s hard to encapsulate everything in one package.

 

When will the Romanian legislation be adapted to the European one regarding retirement age – equal for men and women at 67?

 

The European legislation is one thing, each country sizes up its phenomenon regarding the average life expectancy in that country. When we reach the life expectancy of over 80 years old, then we’ll discuss this matter. For the moment, it will increase by one or two years, probably, in one or two years.

 

In what regards indemnities for mothers, when will that cap be introduced?

 

I am expecting the measure from Ms. Minister Vasilescu. Maybe even this week. (…) It’s possible, if it’s done and she has the complete paperwork.

 

How many persons will be affected? What economies are in question?

 

It’s not necessarily about economies. It’s about the immorality of a situation. In the current law, the income from the sale of a property can be considered relevant income, meaning that if in the year in which a person is pregnant it sells an apartment or a company, that is considered relevant income for the past year. [e.n. – the current law sets the monthly indemnity at 85 percent of the average taxable income in the past 12 months]. The indemnity is calculated regarding this. I’m sorry, but it cannot be. There is a cap in Germany, there is a cap throughout the world. We are the only country that doesn’t have a cap and with slip ups like this that can lead to major slippages.

 

Are you happy with the way in which the Interior Minister and the Labor Minister have managed the relation with the labor unions? For example, the Police unions.

 

The Police unions were right by the fact that after the uniform pay law there was another ordinance, there was a slip up in Parliament and the law that had as a purpose to equalize and set some matters straight turned out crooked. And there was again a discrepancy between servicemen in different ministries and some things were not alright. We are trying to resolve this also this week.

 

What is your relation with the PSD chairman, Liviu Dragnea? Victor Ponta said that it’s inevitable you will take over the party chairmanship.

 

I don’t know what Victor Ponta considers inevitable or not. I don’t desire the PSD chairmanship. I am in good relations with all my colleagues, even more so with the chairman of the party.

 

Do you believe “a new political project for the PSD inside the party” has a chance to succeed?

 

My God, this can’t happen. Another PSD within the PSD? No.

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