Weekly review: IMF rebuked and a verdict for the people

Weekly review: IMF rebuked and a verdict for the people


By Daniel Stroe – Bucharest

Romanian political life has been unusually quite this week, but behind the curtains negotiations and planning are certainly intensively going on as some media revelations already targeted one of the favorite contenders in the presidential race this fall, suggesting the battle is yet to begin in earnest. Dire need for votes has sent the IMF delegation away with a flea in their ear while the Romanian justice struck a historic verdict which sent the state digging for money.

A central newspaper in Romania published an investigation which alleges Klaus Johannis, the German ethnic mayor of Sibiu and a possible frontrunner in this November’s presidential elections, illegally raised hundreds of thousands of Euros from rentals and a trial is underway in this case. It said Johannis got two buildings in central Sibiu, a city in central Romania, by using fake documentation and then rented them which netted him about 200,000 Euros.  “I don’t comment on this and I will let courts do their job” Johannis reacted to these revelations.

Johannis is in advanced talks to be the candidate of a recently forged alliance between the liberals (PNL) and the democrat-liberals (PDL) which has created the main opposition force in the Romanian Parliament. But the article in the central newspaper underscores the political battle already in its prime and efforts to remove Johannis from race as the rightist parties still struggle to make a united front against the ruling social-democrats led by PM Victor Ponta. The latter has not yet announced his candidacy for the presidential elections, but the party is pressing him to accept the task. Behind Ponta’s candidacy lie interests of some colleagues to rearrange the party’s leadership which could happen if Ponta wins or not the first job in the country.

But attacking Johannis from the very onset doesn’t have to be regarded only from the social-democrat perspective. It appears that removing him from the presidential race or at least reducing his chances to win favors the other candidate, already announced, the Right is launching in the political battle: Cristian Diaconescu, former minister of Foreign Affairs. He is the candidate of the Popular Movement Party (PMP), President Basescu endorsed party which scored a mere 6 per cent in last month’s Euro-elections but which is got growth potential, especially depending on how the other two representatives of the Right, PNL and PDL manage to close the ranks.

But what stood out this week is also the Government’s clumsiness in dealing with the IMF due to electoral concerns. Amid a visit of the international creditors’ delegation, Ponta announced his government would cut the social contributions of employers by 5 points as of October, which translates into a 3 billion lei (about 700 million Euros) gap in the state budget in 2015. But the IMF was not convinced about the necessity of the measure, other than the electoral explanation, and left the country with no handshakes with Ponta’s Government. Another visit is not scheduled before this fall and until then the stand-by agreement is still in place, only that Romania cannot access money anymore by the time it sends the IMF a new letter of intent which has to receive green light from the creditors. The Government played down the effects, pointing out the country’s got a solid reserve of 7 billion Euros.

The real risk, as it had been highlighted before, is that Ponta falls prey to the temptation of populism before elections which will impact Romania’s feeble economic recovery. He has already hinted he is interested in raising salaries of some state employees, even though he has launched the message to gauge reactions.

With politicians busy pulling strings before the poll in November, some good news broke this informational apathy. Romania’s High Court decided the state road agency CNADNR has to pay a woman who had lost a hand in a car accident eight years ago record damages of 1 million Euros, putting an end to a trial which started in 2012 and whose verdict is unprecedented in Romania.

The woman had sued CNADNR following an accident which happened in 2006 and which left the her crippled, her right hand been amputated. She was in the passenger’s seat of a car that was heading to the city of Brasov when another car drifted in the opposite lane. Her boyfriend had to veer to avoid the collision and their car hit a road side parapet which pierced the right door and hurt the woman. Doctors couldn’t save her right hand and had to amputate it. An investigation concluded the parapet was poorly maintained and not properly fixed in the ground and the state has to pay for that. The minister of Transport declined to comment whether the verdict may create a precedent in Romania where the state is reluctant to assume responsibility for its errors. The verdict is likely to have effects on the ground and, moreover, make poorly informed Romanians understand their rights come before state’s ephemeral interests.