Romania the unready

In Brussels on December 29, the penny finally dropped. Jean-Claude Juncker, the president of the European Commission, questioned whether Romania is ready for the political give-and-take of running the presidency of the Council of the European Union, which it assumes on January 1.

Mr Juncker told Germany’s Welt am Sonntag newspaper: “I think the government in Bucharest hasn’t yet fully understood what it means to take the chair over the EU countries.”

The role of the EU’s presiding country – held on a rotating basis for six months – includes setting the EU agenda and serving as a diplomatic go-between among the 28 member countries.

Mr Juncker also pointed to deep domestic political divisions and said a “united front” at home is needed to foster unity in Europe. The ruling Social Democratic Party (PSD), now openly anti-European in words and actions, in stark contrast to the staunchly pro-European population at large (which includes the country’s president), makes such unity impossible.

In a speech in early December that touched the realm of paranoia, the party’s leader Liviu Dragnea said that the European Union was “interfering” in Romania’s affairs.

“The EU tells us to suspend laws passed by our parliament. I tell them that our parliament is sovereign. We are the Romanian people. We are not [George] Soros’s people, we are not a people who belong to greedy multinational companies.”

With the possible exception of Britain, which leaves the EU at the end of March, it is difficult to think of any member state that is less willing, less qualified and less well-prepared to take on the European presidency. Romania, having just celebrated 100 years since the unification of its three constituent parts (Transylvania, Wallachia and Moldavia) has never been more divided.

As January 1 approached, the country’s government, nominally led by prime minister Viorica Dancilă but controlled by Mr Dragnea (whose various convictions for vote rigging and corruption prevent him from formally being PM), openly defied the president, Klaus Iohannis, by refusing to recognise his decision to prolong the mandate of the head of the country’s armed forces. For several days, Romania’s army had no commander-in-chief. Mr Dragnea even called for the president to be put on trial for high treason, after Mr Iohannis suggested that Romania was not ready to take on the EU presidency.

Even the country’s own European Commissioner, Corina Crețu, a member of the PSD before moving to Brussels, has become engaged in a very public dispute with the government in Bucharest over Romania’s failure to use European funds. “Romania is not in a position to pass up the chance of development simply to protect the pride of some politicians,” she said. “It is a shame that Mrs Dancilă and those around her are so poorly informed.”

Transylvanian exceptionalism

This failure to make European funds available to the country’s regions led, in December, the mayors of four cities in Transylvania (Arad, Cluj, Oradea and Timisoara) to announce the creation of a ‘Western Alliance’ that would cooperate on major projects independent of the central government in Bucharest. Most analysts were surprised only by the fact that it had taken them so long.

“If Romania continues along Dragnea’s path, away from the EU, then Transylvania will not follow,” said Cristian Tudor Popescu, an influential political commentator.

“Before Transylvania united with Romania it was in a kind of European Union. The rest of the country was isolated. Transylvania was part of an empire of 40-50 million people, a European empire. No, it wasn’t democratic, and it wasn’t organised as the EU is today. But it was an empire with European structures, with a European administration, European institutions and European education. And Transylvania was a part of it. If Transylvania had not joined with Romania it could have become a little Switzerland: a multi-ethnic, multi-confessional state. That’s why if Dragnea continues to push Romania along an anti-European path, Transylvania will not follow. Transylvania has been part of Europe for too long.”

That is not to say Transylvania is alone in opposing the PSD: the whole country has turned its back on the party. But to understand modern Romania is to understand what has been called Transylvanian exceptionalism. Napoleon said the Balkans start at the gates of Vienna. They don’t. They start at the Carpathians, the mountain range which arcs through Romania, cutting off Transylvania from Wallachia and Moldavia. As Mr Popescu points out, Transylvania was for centuries part of the Austrian (or Austro-Hungarian) Empire. Wallachia and Moldavia were Ottoman vassal states. It shows: compare the chaos of Romania’s capital, Bucharest (situated in Wallachia) with the order of Cluj, Sibiu or Oradea, in Transylvania. Even today, one hundred years since the country was united, buying property in Transylvania is easier than buying property in Wallachia or Moldavia. There is a paper trail going back centuries: the Austrians kept proper records, the Turks (or their vassals) did not.

Heirs of the Ottoman Empire

The current Romanian government is in many ways the heir of the Ottoman Empire, deliberately creating chaos so as to mask its many shortcomings, looking after its bureaucrats and loyal servants so that they may look the other way as it carries out theft on a nationwide scale.

That’s why the PSD despises the European Union and its notions of fair play, equal opportunities and transparency. The PSD for many years tried to fool the EU, ticking just enough boxes in the hope that prying eyes would keep their distance. That tactic did not work: the EU has too many checks and balances, which is why the PSD has simply given up bothering. Uninterested in EU funds (which come with too many strings and are far too difficult to be siphoned off) it has now chosen to openly defy the EU. It has nothing to lose.

Such defiance pleases a tiny minority in Romania. Extremists on both the far right and the far left bemoan a loss of independence since Romania joined the European Union, and, like Mr Dragnea, view any attempt by external partners to defend the rule of law as abominable interference in the workings of a sovereign state. They would rather see the current kleptocracy preserved than admit the EU has a role to play in ensuring Romania does not backslide on its commitments to adhering to European values.

These people are few, however. The Romanian population at large, fervently pro-European and always looking west, not east, opposes the government in ever-increasing numbers. More than half of Romanians (52 per cent) think the EU is going in the right direction, while only 24 per cent feel the same way about their country. Latest opinion polls place support for the ruling party at just over 25 per cent. In December 2016’s general election it took 46 per cent of the vote. Personal support for the gaffe-prone Mrs Dancilă is almost non-existent: more than 87 per cent of Romanians believe she is doing a poor job.

The fight against corruption

At the root of the popular dissatisfaction with the regime are its ongoing attempts to ensure that leading members of the ruling party and its powerful supporters are spared jail for corruption offences.

Earlier this year, the PSD forced Laura Codruța Kovesi, the hugely popular and highly effective boss of its anti-corruption unit, the DNA, out of office.

“The results that we have achieved have made us something of a model in the region,” Ms Kovesi told Emerging Europe in an interview shortly before she left office. “The DNA has been presented as an example of good practice by the European Union.”

The government wants pardons for those Ms Kovesi and her brave team have convicted, and an amnesty for those still under investigation or facing trial. A leading PSD figure, the former minister of justice Florin Iordache, has said the country needs to “wipe the slate clean” before it can make real progress.

One of the first acts of the PSD when it took office in January 2017 was to introduce such a pardon and amnesty law, passed not by parliament but by emergency ordinance. The ordinance triggered the largest street protests in Romania since the fall of Nicolae Ceaușescu in 1989. After a week of demonstrations, which at their height saw more than 600,000 people on the streets of Bucharest and other major cities around the country, the government backtracked and annulled the ordinance.

That it was able to do so was fortunate. Probably by mistake, a clause in the ordinance stated that it would only come into effect 14 days after its publication. It is unlikely the same mistake will be made twice. Under Romania’s criminal code, the ordinance needs to be in effect for just a second. Even if it is immediately (or later) withdrawn, it will allow thousands of convicted criminals to walk free, their criminal records expunged. 

Mr Dragnea has called for a new ordinance to be passed by the government before January 15. He will personally be one of the main beneficiaries. Sentenced to three and a half years for corruption in June, he is currently free pending an appeal. A pardon would allow him to become prime minister, as well as clearing the way for a presidential bid: Romania votes in a presidential election in December 2019. Mr Iohannis is currently expected to win a second term.

The coming storm

On paper, Romania has over the past several years enjoyed a period of solid economic growth. However, this growth has been based primarily on consumption, and has slowed considerably in 2018, to 4.3 per cent in the third quarter of 2018, from 8.8 per cent for the same period of 2017.

What’s more, after hiking pensions and civil service salaries, the government is short of cash. Late at night on December 28 the finance minister, Eugen Teodorovici, announced that the budget deficit for the first 11 months of 2018 stood at 2.74 per cent of GDP, the highest in the EU. The government now faces a shortfall of around 30 billion lei (6.44 billion euros). The budget for 2019 has yet to be presented to parliament.

Desperate for liquidity, the government passed an emergency ordinance on December 21 that will tax the assets of banks, and introduces a tax on turnover (and not profit) for companies in the energy and telecommunications sectors. The government has called the new measures a tax on greed. The day it was announced, the Bucharest Stock Exchange saw its biggest fall in a decade.

“This tax on greed is little more than state piracy,” said Vlad Alexandrescu, a senator for the opposition Save Romania Union (USR). “After two years of unimaginable waste on pensions and the salaries of its political clientele, the state has found itself left without any money. The state needs cash, and it needs it now. Not tomorrow, not the day after tomorrow, now.”

While the PSD has claimed that the tax on greed is about making foreign companies in Romania pay their way, Mr Alexandrescu believes that the government has other motives.

“This is not about protecting Romanian companies,” he says. “Dragnea’s pirates want nothing more than to be able to borrow money from the banks as cheaply as possible in order to finance the special pensions they have to pay. All this will be done off the backs of ordinary Romanians. They are the ones who will pay for this economic piracy and incompetence.”

The PSD has over the years made something of a habit of stepping away from government just as the Romanian economy is about to go belly up, leaving others to deal with – and take the blame for – its mess. Many commentators feel the same thing is about to happen.

“That’s probably Dragnea’s stragegy,” said Stefan Vlaston, a columnist at the newspaper Adevărul. “After ruining the economy, he withdraws the PSD from government, leaving the opposition to take the austerity measures needed to see the country through a crisis which is only just beginning. After a year or so of railing against austerity he will then return, posing as the only man who can save the country.”

As Romania takes on the EU presidency two key questions remain unanswered.

Will Mr Dragnea and his government dare to pass an emergency ordinance that pardons thousands of corrupt politicians, in defiance of the EU, while holding the presidency? And will the PSD leave office during a presidency it once hoped would offer it international prestige?

We should not have to wait too long to find out. Romania’s immediate future depends on Mr Dragnea making the right choice in both cases. Previous experience does not fill anyone with optimism.