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February 2, 2023

PNL leader criticises SFDI bill: It’s a large-scale scam, consequences will be catastrophic for Romanian companies

On Monday, National Liberal Party (PNL) President Ludovic Orban criticised the bill on the setting up of the Sovereign Fund for Development and Investments (SFDI), which he called “a large-scale scam” whose consequences will be catastrophic for Romanian companies.

“As anticipated, it’s a large-scale scam concocted by the ruling party, and which seeks to attain several objectives. First: because they looted the budget with various expenditures whose destination was anything but public investments, (…) PSD thought it should support some investment works that they do not cover from the state budget and that they are unable to carry out in public-private partnership, via this so-called Sovereign Fund for Investments. The objectives sought by PSD, in my opinion, are very clear: to no longer be obligated to respect the rigours of European and Romanian public procurement legislation, to be able to exclude from the budget deficit public expenditures that should be financed from the state budget. The third thing they are after is to loot the majority stock shares in the main profitable Romanian companies,” Ludovic Orban stated.

The PNL leader also claims that, in order to obtain financing for this Fund, the Government will use these companies’ shares as collateral for loans or the issuance of bonds, the investments set to be made in projects that will not generate profits so that they could be bought back or so that the money invested in bonds issued by the Fund could be paid back to the investors.

“Clearly, investors will move against the companies whose state-owned shares are part of this Sovereign Investment Fund,” Ludovic Orban said.

He warned that the results and consequences will be catastrophic for Romanian companies, especially for the profitable ones, such as Romgaz, Transgaz, Transelectrica, Electrica or Hidroelectrica.

“We warn PSD not to go forward with this bill, to give up on this pseudo-sovereign fund of investments which is a mega-scam that will generate extremely grave effects in the Romanian economy and that will deprive the Romanian citizen and the Romanian state of the last profitable companies that are still part of the state’s portfolio,” Orban concluded.

The bill on the setting up of the Sovereign Fund for Development and Investments (SFDI) was finalised by the Finance Ministry – the institutions that will oversee the Fund – and put up for public consultations last Wednesday. The Fund will include 27 minority and majority state participations in profitable companies, with an accounting value of around 45 billion lei (EUR 10 billion).

The bill will be sent to the Government, along with Eurostat’s report (ex-ante opinion) on the classification of the Fund (budgetary/outside the budget), and the Government will approve it during a meeting in September and then send it to Parliament.

The Romanian state will be sole shareholder throughout the SFDI’s existence. The Fund’s registered capital will consist of share packages and cash (1.85 billion lei), of which 50 million lei will be deposited the moment it is set up, in 2017.

The companies included in the Fund are: Engie Romania (the state holds 34% of its shares), Electrica (48.78%), Delgaz Grid (13.51%), E.ON Energie Romania (31.82%), Biofarm (1.16%), Chimcomplex (12.89%), OMV Petrom (20.63%), Telekom Romania Communications (45.99%), Antibiotice (53.02%), National Company for the Control of Boilers, Lifting Gear and Pressurised Containers (100%), Romanian Lottery (100%), National Salt Company (51%), IAR S.A. (72.19%), Oil Terminal (59.62%), Cupru Min (100%), Unifarm (100%), Mineral Waters National Company (100%), Maritime Danube Port Authority National Company (92.3%), Tourism Investments Company (100%), Romgaz (70%), Hidroelectrica (80.05%), Bucharest Airports National Company (80%), Nuclearelectrica (82.49%), National Printing House (100%), Maritime Ports Authority (80%), Energy Participations Management Company (100%) and Conpet (58.72%).


“Those who rule Romania today don’t want to observe EU democratic standards”


On Monday, PNL President Ludovic Orban also criticised the discourse of the ruling coalition’s leaders, calling it “outrageous” and stating that “irresponsible attacks” on foreign companies and ambassadors are proof of a nationalist and anti-European discourse that goes against the values of democracy and the market economy.

“The systematic attacks against foreign companies, the irresponsible attacks launched from the highest level of Government, from the Prime Minister’s level, against the financial-banking system, the attacks against the ambassadors of the main states that are Romania’s partners in NATO and the EU, the extremely harsh attitudes against some opinions that are normal and natural and that were expressed by ambassadors but not only by them – I even recall the opinion launched by the French President during his visit to Romania – are being completely ignored; moreover, the current ruling coalition is starting to have a nationalist, gregarious, anti-European discourse that goes against what the values of democracy and of the market economy mean,” Ludovic Orban stated.

“I’m asking those who are ruling Romania today where do they want to take Romania. They no longer want to be part of the EU, of NATO? Do they want to throw Romania, particularly in the situation and the international context we are in today, in a position of not observing our commitments toward our Euro-Atlantic partners? This road leads nowhere. Gentlemen who govern Romania, turn back to Europe, to NATO, to the strategic partnership with the U.S. and give up the whole populist demagoguery with which you are trying to win some votes from people that will not vote for you anyway,” he added.

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