The Week in Review March 23-27
Click here for a roundup of the week's main stories.
Corina Cristea, 28.03.2015, 14:00
The government approves the new fiscal and fiscal procedure codes
The Romanian government has approved the new draft Fiscal and Fiscal Procedure Codes, which were forwarded to Parliament for debate and approval. The codes are meant to speed up economic growth by cutting down on taxation. The new provisions with the greatest impact are the reduction of the VAT from 24% to 20% for all goods and services, and to 9% for meat, fish, milk and dairy products, eggs, vegetables and fruits. Although these reductions are supposed to take effect as of January 2016, PM Victor Ponta claims that they might be applied before that date. He added that the new fiscal codes would not affect either pensions or salaries, and that a flexible and modern framework would be created for local fees and taxes. Excise duties on the main energy products will drop. Other measures provided for in the new fiscal code, to take effect as of 2018, are aimed at reducing the social security contributions to be paid by employers and employees by 2% and 3% respectively. As regards the flat tax, it will drop from 16% to 14% as of 2019. Eliminating taxation of dividends, the tax on special constructions and reducing excise duties are other measures to be implemented by 2020. The parliamentary opposition has announced it will propose amendments to the two codes. The Liberals believe that an increase in local fees and taxes, resulting after the implementation of the two new codes, will affect the business environment. They promise to analyze the sustainability of some of the measures announced by the government dominated by the Social Democrats in order to avoid a shortage of funds for pensions, salaries, healthcare and education.
The anti-corruption fight continues in Romania
The former finance minister Darius Valcov will be investigated under house arrest in a case in which he is accused of influence peddling. Investigators claim that between 2008-2009, when Valcov was the mayor of the town of Slatina (in the south of Romania), he preferentially awarded contracts on public money in exchange for 2 million Euros in bribe. He was placed under temporary custody on Wednesday, several hours after the Senate approved the National Anti-Corruption Directorate’s request for his arrest. However, the senators have rejected a similar request in the case of the former transport minister Dan Sova who is accused of accessory to official misconduct, in a case in which prosecutors are investigating the activity of two state-owned energy companies. The Senate’s decision regarding Dan Sova, known to be a friend of PM Victor Ponta, sparked off a wave of criticism and reactions from the Romanian president, the opposition, the National Anti-Corruption Directorate and several foreign embassies in Bucharest. President Klaus Iohannis notified the Constitutional Court, asking them to look into the constitutional conflict between the judicial and legislative branches in Romania. The Romanian president believes that Parliament’s attitude in cases such as that of Dan Sova has created institutional blockages, as it prevented the implementation of the legal procedures and the judicial process. The opposition Liberal party has also challenged the Senate’s decision at the Constitutional Court, which announced it would deal with the matter on April 8th. The vote in the Senate has re-ignited the public debate on the controversial immunity of Romanian MPs.
Romania marks 97 years since its union with Bessarabia
On March 27th Romania marked 97 years since its union with Bessarabia, a historical province in the east of the country. On the occasion, the minister delegate for the relation with the Romanians in the Diaspora, Angel Tilvar, paid an official visit to the Republic of Moldova. In Bucharest, the speaker of the Moldovan parliament, Andrian Candu, met with the Romanian PM, the foreign minister and the presidents of the two chambers of Parliament, who reiterated their support for the Republic of Moldova’s European integration. The union of Bessarabia with Romania was marked in both countries by debates, book launches, symposiums, concerts and religious ceremonies. On March 27th 1918, the Country’s Council (the legislative body in Chisinau) decided on the union of this province, with a predominantly Romanian-speaking population, with the motherland. Until then the province had been under the Tsarist empire rule. The current ex-Soviet Republic of Moldova was set up on part of the Romanian eastern territories, which were re-annexed by Moscow in 1940, following an ultimatum given by the Soviet dictator Stalin.
Romanian-British relations
The British defense secretary, Michael Fallon, paid a visit to Romania to talk with his Romanian counterpart Mircea Dusa about the security situation in the Black Sea area and the measures to be taken by the two states to ensure a permanent presence in the region, by rotation, of NATO assets. Fallon announced that Great Britain would contribute troops to the two NATO commands that will operate in Romania. The two officials also tackled the political and military situation of the region against the background of the Ukrainian crisis and of Crimea’s annexation by Russia. The developments in the EU’s eastern neighborhood, especially those in Ukraine, were also examined in London by the Romanian foreign minister, Bogdan Aurescu, together with his British counterpart Philip Hammond. The two hailed the close relations and the good cooperation between the two states, which are based on a Strategic Partnership that mainly focuses on security and defense.
