Talks on the new fiscal measures

The effects of emergency decree 114 are still in the spotlight

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Ştefan Stoica, 05.03.2019, 13:37

Two emergency decrees passed by the Government, modifying the justice laws and imposing additional taxes on key economic sectors such as banking, telecommunications and energy, have sparked heated public reactions and have deteriorated even more the already tense relationship between the leftist power and the rightist opposition. What the two decrees have in common is that they were passed by the government made up of the Social Democratic Party and the Alliance of Liberals and Democrats without previous consultations with those affected by these changes and the fact that they have been harshly criticised not only at home, but also abroad, in particular by European partners. On Monday, PM Viorica Dancila had to face accusations coming from the opposition as regards the decree which the National Liberal Party and the Save Romania Union say should be abrogated because it affects the business environment and the banking and constructions sectors. The decrees enforcement resulted in higher gas and electricity bills and more expensive loans, leader of the Liberal MPs, Raluca Turcan, has said. It is the Prime Minister that holds legal responsibility for the decree, Turcan went on to say, even if its de facto initiators are the Social Democrat leader Liviu Dragnea and the PMs economic adviser, Darius Valcov. Raluca Turcan:

“You have signed this awful decree that has turned Romanians lives into a nightmare – Emergency Decree 114, reflecting the greed of the group headed by Dragnea and Valcov, that imposes new taxes, hinders the young generations pension pillar and forces local administrations to increases taxes and duties.”

On her part, PM Dancila has pointed out that the decree includes provisions that stimulate economic growth by increasing the level of investment and protecting household electricity consumers. Viorica Dancila:

“Do you think its natural for the Romanians to pay interest rates that are twice as high as the ones other EU citizens pay? Does it bother anyone that we think the Romanian way? Emergency decree 114 is intended to bring these billions of euros to the state budget for the construction of schools, hospitals and motorways. In the energy sector household electricity consumers will be protected through a new mechanism, which is the universal service for household consumers.”

Whereas the Save Romania Union accuses the power that the new fiscal measures have determined rating agencies to downgrade Romania and endanger the privately administered pensions, the Alliance of Liberals and Democrats, the Social Democrats governing partners, has accused the opposition that their statements create panic among the citizens. The Democratic Union of Ethnic Hungarians in Romania supports the ruling coalition in Parliament, but believes the decrees enforcement should have been postponed. According to the EU, the habit of passing emergency decrees at the end of a fiscal year and enforcing them almost immediately has to stop, because it creates uncertainty and ambiguities. Also, the Alliance of Romanian Employers Confederation has asked for the implementation of some provisions stipulated in the decree to be postponed, in order to find solutions in keeping with the Governments purpose, but without significantly affecting the social and economic sectors.