Internal Affairs

The first week of the state of alert is coming to an end. It has proved to be an uneventful week, marked by political declarations that aim to set the tone for the beginning of the electoral races. The legislative void, between the state of emergency and alert (May 15th – May 18th) could not be filled by the Orban Cabinet. Indeed, it is argued by the opposition, in this case in accordance to Robert Cazanciuc, PSD senator and president of the Senate, that the emergency ordinance that aims to bridge this void is unconstitutional, even more so, anti-constitutional, as it was remitted 20 minutes before the state of emergency expired.

Some political declarations related to the possible suspension of President Klaus Iohannis. Yet, on May 17th, 2020, according to a statement by Marcel Ciolacu, PSD president, the current epidemiological context does not allow such actions, in order to “avoid chaos”, even though the opposition argues that the president oversteps his constitutional powers. He also reiterated the fact that once the state of alert is over, PSD will submit a vote of no confidence against the Government and that Parliament will be sitting in extraordinary session during this period, thus cancelling the traditional summer holiday for the MPs.

ProRomania president, Victor Ponta, is getting impatient about the vote of no confidence that will supposedly be delivered once the state of alert is over. According to him, the vote should have been cast as soon as possible, indicating that the Government has nothing to fear with the likes of PSD in Parliament. PSD, however, through their spokesman, Lucian Romașcanu, has announced that next week, two motions of censures will be filed, one against the Minister for Internal Affairs and one against the Minister for Education. Indeed, it seems that the PSD is laying the ground for more actions that discredit the Government, in so far as recent as recent polls indicate a shift in voter trust. Indeed, on May 19th, PSD has filed a simple motion against the Minister for Internal Affairs, with the Senate. The debate and vote will be held on May 26th.

Meanwhile, the Prime Minister does not seem eager to block the use of the National Program for Local Development. According to him, this is not the first program of the sort and localities have received funds before. This is done in an effort to delimitate himself from the what the party propaganda considers to be “the use of National programs to fund local PSD barons”.

PNL sources have stated for Hotnews that during the Executive Bureau meeting on May 19th, Ludovic Orban has made it known to the Bureau that he intends to have local elections in September or October at the latest, and Parliamentary elections should be in December. The same argument was made by Eugen Tomac, PMP leader, who stated that local elections will be held on September 27th and general elections on December 6th. If the elections happen to coincide with a second wave of COVID-19 spread, it is possible that they will be postponed. However, the latter is a highly unlikely scenario.

In this vein, we must remind you of two developments. On Monday, the Committee for Public Administration in the Senate has adopted a favorable report for a UDMR backed draft bill granting mayors 5 years of office instead of 4. On Thursday, Dan Barna has stated that in his view, the fusion between USR and PLUS should take place before the local elections. Moreover, USR has started to propose their governance measures. In a Facebook post, Dan Barna’s party eludes to the implementation of a project which aims to de-bureaucratize Romanian entrepreneurship.

According to a statement by Ludovic Orban, because of the modifications brought by Parliament to the emergency ordinance regulation the state of alert, there may be delays in providing vulnerable groups with face masks against the Covid-19 epidemic.

In a speech on May 19th, President Klaus Iohannis has called on all ”credible political forces” as well as on the private sector to bolster the trust of employees in the system, and also classified any attempt at a no confidence vote in the following period as an act of gross irresponsibility.

External Affairs

The European Commission has reiterated on Wednesday that the Romanian Government must take all necessary steps to effectively respond to the Covid-19 pandemic, to support the economy and the economic restart that will follow. According to the Commission, the Government must continue to strengthen the healthcare system and further professionalize the public administration.

Siegfried Mureșan, PPE vice president, has stated that an emergency budget is necessary, in case PPE decides to vote against the budget of the EU for 2021.

Fiscal and Economic Updates

According to the Minister for Public Finance, Florin Cîțu, Romania has seen in Q1 2020 a real growth of 0,3% as opposed to Q4 2019, which means an annual growth of 2,7%. According to him, all analysts and economists will revise their predictions based on this data. According to Eurostat data, this is confirmed, Romania having now the most significant economic growth out of the 27 member states of the EU.

Florin Cîțu also believes that the possibility for a technical recession is really low, and that austerity measures will not be taken, nor will there be cuts in pay or pensions.

On May 18th, Florin Cîțu has further supported his point that Romania has a real economic growth of 0,3%, going as to state that critics and their estimates are wrong, as they are much too pessimistic. According to him, the rating agencies are wrong by around 1,2%, and this aspect must be correct. He also announced that new fiscal measures are in the works, aimed at stimulating tax payers in good standing.

During the Prime Minister’s Hour speech in Parliament, Ludovic Orban has stated that the Government is preparing a plan of economic recovery that is based on investment in innovation and applied innovation results. According to him, the Government has identified financial resources, close to EUR 2 billion, which it will use to generate programs for supporting SMEs.

During the ECOFIN meeting on Tuesday, the Minister for Public Finance, Florin Cîțu, has supported in his speech the implementation of the European Plan against Unemployment (SURE) and has stated that this must be done without delay.

According to a statement by Prime Minister Ludovic Orban on May 20th, the Government will cover 30% of the gross salary for companies that hire people in need of employment, for a period of three months.

According to Eurostat data Romania has the fourth highest rate of inflation in the EU, at 2,8%.

Thursday evening, the Minister for the Economy has approved an emergency ordinance that will provide state aid to companies that have over 100000 employees and are among the greatest energy consumers in Romania, in order for said companies to remain competitive.

On May 22nd, 2020, the prime minister met with the Romanian Banks Associations. In the aftermath of the meeting, he stated that the success of the economic rebuilding plan lies in the partnership with the financial-banking system. The same idea was supported by the Minister of Finance, Florin Cîțu. The transcript of Florin Cîțu’s declarations can be accessed here. The prime minister also mentioned some of the topics discussed, among which are IMM Invest, the „First House” program or the issue of mortgage loans.

On the same day, the president met with the RBA. The outcome of the meeting is currently unknown.