Weekly review: Romanian state budget pits president against the PM

Weekly review: Romanian state budget pits president against the PM


By Daniel Stroe – Bucharest

This closing week has been by far dominated by the renewed political fight between President Traian Basescu and PM Victor Ponta over the 2014 state budget which seems to set the stage for next year’s electoral bickering which many warn will reach its climax.

On Monday, Basescu warned in a public statement he will not promulgate the 2014 state budget unless the government gives up the fuel tax of 0.7 Euro recently introduced in agreement with the International Monetary Fund. Basescu pointed out the new excise will spark an avalanche of price increases and will stall the economic growth. “I will not assume this anti-economic measure against Romania’s interests and economic growth” Basescu said. He also warned the 0.7 Euros per liter excise is merely meant to feed the electoral coffers of the ruling coalition.

On Tuesday, the Parliament, which is dominated by the 70 per cent majority behind the ruling social-liberal coalition (USL) passed the 2014 budget which cannot be implemented unless the President approves it. In a speech before the lawmakers, Ponta accused Basescu of lacking responsibility and discernment, one of the most serious accusations the PM has brought against the head of state. Some in the USL warned Basescu that, unless he signs the budget law, he may be charged with treason. A meeting between Ponta and Basescu yielded no results.

On Wednesday, the Romanian frail justice took another step forward and sentenced two former ministers to prison terms in the so-called strategic privatization file. Codrut Seres and Zsolt Nagy, former minister of Economy and, respectively, Telecommunications, received six and, respectively, five years prison terms for treason and abuse of office. The two were proven to have meddled with privatization files in order to favor some customers. Three other foreigners were convicted for espionage. Though the verdicts are not irrevocable, it is unlikely the final court will reverse it.

On Thursday Romania and Bulgaria were confirmed they would not join Schengen anytime soon. Time has not come yet for lifting border controls for the two countries, German minister of the Interior, Hans-Peter Friedrich, said as he arrived for the Justice and Home Affairs meeting in Brussels. Romania and Bulgaria expressed their disappointment in a joint statement and underlined all the technical criteria have been met in order to join Schengen. Many countries said they would rather wait for the next European Commission report on the progress in the fields of justice Romania and Bulgaria have made before making a decision concerning Schengen.

On Friday, President Basescu tried to defuse the tense political climate in the country and announced he would promulgate the social insurance budget, but not the state one, leaving the fight open. On the same day, the government announced it asked the National Anti-Corruption Department (DNA) to launch a criminal investigation into the Bechtel affair, one of the most controversial contracts in post-communist Romania. The government accuses former ministers in the 2005-2011 executives that worked under the political patronage of Traian Basescu of misusing state funds, incurring huge losses to the state budget. Despite this what appears to be a mere image stunt, the current ruling coalition failed to present the public with the original contract between the Romanian state and the American company Bechtel.