COMPANIES DEFENCE ECONOMY INDUSTRY POLITICS

Senate passes legislative proposal to move defense industry from Ministry of Economy to Ministry of Defense

The Senate’s plenary sitting passed on Wednesday a legislative proposal to move the defense industry from the administration of the Ministry of Economy to the Ministry of National Defense (MApN), in order to revitalize this branch at a high rate in order to ensure the transformation, modernization and endowment of the Romanian Armed Forces’ capabilities.

The draft was adopted with 89 votes “in favor” and nine “against”.

The proposal, initiated by Social Democratic Party (PSD) lawmakers, aims at transferring the state’s interests, where it is the sole or majority shareholder, to the military industry companies.

“The importance of this proposal lies in the fact that the MApN could be able to size the defense industry much more correctly, could re-establish production capacities, promote military production with the relevant research. What we are proposing is a solution to unlock the current situation that proves to be damaging to the Romanian economy, disadvantageous for the defense industry and the capabilities needed to defend the country,” said Social Democratic Party (PSD)  Serban Nicolae, one of the initiators of the draft law.

Within 180 days, through methodological norms, the Government will establish all the details regarding the transfer of this management of participations in terms of staff structure, budgetary dimension and so on, the legislative text provides for.

Save Romania Union (USR)  Senator Nicu Falcoi said that through this transfer of the defense industry from the Ministry of Economy to the MApN, much of the 2 percent “that should normally be used for the Army’s endowment will result in the payment of those debts and other ‘black holes’ that exist in this industry.”

In his view, “this is nothing but the transfer of a ?black hole’ from one ministry to another.”

“The MApN budget will be practically cannibalized by this defense industry, which requires very large investments, but they should not be made from the MApN budget. We will also defy any economic logic. The buyer will become also producer and the products will consequently no longer have the necessary quality. The MApN should take very seriously the assessment of its needs with regard to armament, and this could be done through a strategic defense analysis which is totally lacking in Romania,” Falcoi said.

The Senate is the first Chamber notified.

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