Alexandra Iancu – University of Bucharest
BRIDGE Network Country Report
- Crisis Impact and Response
Although Romania remains outside of the Eurozone, the financial crisis hit the Romanian economy hard. The first signs were felt in 2009, with a 7,1% loss in GDP, forcing the government to secure external financial aid of 20 bn. euros from the IMF, the EU, the World Bank and the European Bank for Reconstruction and Development (EBRD), the largest loan in the country’s history. Almost half of the sum – presented to the public as merely a safety net – went directly to finance salaries and pensions. In the following year, on the backdrop of negotiations with the IMF, the executive led by the Democratic Liberal Party (center-right, EPP, later merged with the National Liberal Party), decided to engage its responsibility before Parliament on an austerity package that inflicted a general 25% salary cut in the public sector, a 15% cut of the pensions and the scrapping of various public and welfare benefits. Subsequently the Romanian Constitutional Court ruled the downsizing of the pensions unconstitutional (Decisions 872/2010; 874/2010). In order to adjust to the effects of the Court’s ‘pensions decision’ and maintain a balanced budget, the government decided to additionally increase the VAT from 19% to 24%. Despite the deficit, high unemployment rates, and the draconian salary cuts, no massive protest movements or political realignments occurred. Instead, the Euro-crisis eerily led to the reinforcement of neoliberal discourses pitting the private sector against the public sector. Political rhetoric still follows the former President Traian Basescu’s quip: “The state is a very fat man leaning on a weak and thin man, namely, the Romanian economy”
- Migration Crisis
Romania is the EU country with the lowest rate of inward migration (0,9%) and it has high administrative hurdles for asylum seekers. The migration crisis revealed the local political inconsistencies, the lack of resources and legislative framework shortcomings. Initially, in 2015, the Romanian president, Klaus Iohannis announced that that country did not have the capacity/infrastructure to accommodate more than 1785 refugees. His position was subsequently amended, with the new quota system which allotted to Romania 4837 refugees (2475 to be added to the 1785 already voluntary accepted, with a long-term provisional number of 6351 refugees). Nevertheless, Iohannis insisted on the voluntary participation of the EU countries in finding solutions to the migration crisis (thus implicitly opposing mandatory quotas). In Romania, the migration crisis did not foster substantial proposals, political or social conflicts. This is in part due to rather high public approval rates, as most citizens (64%) declared themselves in favor of the idea that the Syrian refugees should benefit from a form of protection provided by the Romanian state. More importantly, Romania has been a transit country rather than a genuine host country for asylum seekers. While Syrians were the main asylum seekers percentage-wise in 2015, Romanian authorities received about 2000-3000 requests (a diminutive number when compared with the 150,000 similar demands addressed to the Hungarian neighbor, a smaller country).
- Rule of Law Crisis
Since its EU accession in 2007, Romania (with Bulgaria) has been subjected to a post-accession conditionality: the cooperation and verification mechanism (CVM), centered on judicial reforms and anticorruption. The success of the anticorruption campaign, in terms of the number of high-ranking officials convicted on corruption related cases carried out on the basis of the CVM, became a domestic political conundrum, leading to increased political polarization. The main ideological divide pitted the redistributive social-democratic policies against a centre-right anticorruption discourse targeting national oligarchs and seasoned with a variety of neoliberal policies. Recurrent political crises tend to amplify this polarization and unavoidably include in the domestic conflicts various integrity politics dimensions. Such was the case in 2012, when the social democrats, in an atypical alliance with the liberals, attempted to swiftly modify institutional structures to facilitate a presidential impeachment, were harshly rebuffed by the European Commission. More recently, a 2016-2018 campaign led by the then-governing parliamentary center-left majority and focused on reforming the judiciary and in particular the Public Ministry (introducing for example new rules concerning the appointment and dismissal of high-ranking prosecutors and the creation of a Special Section Investigating Offences Committed within the Judiciary, SIOJ) raised additional concerns regarding the rule of law in Romania. The reforms had been primarily justified by the center-left governing coalition with the argument that the anticorruption campaign had been biased and selective and doubled back on an internal conflict concerning the dismissal of the chief anti-corruption prosecutor Laura Codruța Kövesi (and the lack of the national government’s endorsement for her candidacy to the office of EPPO Chief Prosecutor). The changes, which appeared conducive to softening the fight against corruption, were met with social resistance, as hundreds of thousands of Romanian protesters flooded Bucharest and other major cities in the country. At the EU level, these actions fueled more general narratives regarding the emergence of a so-called post-accession backsliding (Greco 2018, Venice Commission 2018, EC 2018). In the end, the reforms were not fully implemented and their initiators, the social democrats (after a change in party leadership) rapidly abandoned their initial conspiratorial discourse of a ‘deep state’, which had placed them in Polish and Hungarian company.
Such conflicts surrounding integrity issues are prone to reinforce electoral divisions (key triggers in political mobilization) and territorial cleavages (as local political competition resembles the Polish party system articulation). The Romanian center-right parties defend mostly cosmopolitan values, represented by the urban, educated middle-classes. Centre-left parties regularly compete on a redistributive agenda and stand primarily for the rural and poorer communities from the Eastern and Southern parts of the country. This also coincides with the “historical regions”, with Transylvania becoming culturally reimagined as the frontrunner of ‘modernization/westernization’ as opposed to more ‘backward’ regions of the country. The civilizational narrative encouraged new regional initiatives lobbying for extensive autonomy (i.e., the West Alliance – mayors from the Western part of the country seeking to bypass the capital and to directly secure EU regional development funds) and electoral factors which tend to maximize regional identity issues.
In recent times, the polarization surrounding integrity issues seems to go beyond the left-right divide, as it permeated political conflicts on the center-right. In September 2021, the judicial reforms became a divisive issue in the coalition crisis (formed by the National Liberal Party and the Save Romania Union – USR (the latter created in 2016 as an anticorruption center-right party). The unilateral decision of the liberal Prime minister, Florin Cîțu to dismiss the USR’s Minister of Justice Stelian Ion (without previous warning or consultation with the governmental allies) has been publicly justified in part by the delays in dissolving the Special Section Investigating Offences Committed within the Judiciary (SIOJ). Stelian Ion, in his turn, declared that the real reason for his revocation had been the launching of the procedure and “political” interest surrounding the appointment of the high-ranking prosecutors.
As in the migration crisis, Brexit flew under the radar in Romania, even though almost one million Romanian citizens had requested UK residency under the Settlement Scheme (the largest ECE community after the Poles). At the national level, according to the Romanian National Bank, Brexit will not greatly impact on the Romanian economy and the banking sector on a long term, given the low degree of integration and cooperation between UK and Romania. There are about 3000 (small) firms with British capital (1,6% from the overall business turnover and 1,3% of the total number of employees in the private sector). In April 2021, a new bill has been adopted to symmetrically implement the protection of rights concerning the British citizens in Romania.
- Differentiated Governance
- Policy Differentiation
Romania’s accession to the EU was disconnected from the 2004 cohort and delayed by three years (on January 1, 2007). Furthermore, the country was placed, together with Bulgaria, under a new form of conditionality, through the institution in 2006 of the Cooperation and Verification Mechanism (CVM, 2006/928/EC) on judicial reform and the fight against corruption. While the mechanism had been initially designed for three years, CVM has not been lifted ever since. Reports concerning the progress recorded under the CVM are issued twice a year (in general). Ending the CVM oversight became in the post-accession period an important point on the agenda of the Romanian governing parties, with political leaders pointing to the fact that Romania complied with all the institutional benchmarks required by the CVM. In more recent times, except perhaps in times of domestic political crises, the CVM reports have been rather ‘normalized’ (they raise less debates and less polarization).
As the mainstream parties remained rhetorically highly Europhile, they all included in their electoral programs the objective of adopting the Euro currency and in joining the Schengen area. However, at present, Romania has yet to reach these two targets. Furthermore, there is no reliable projection as to the moment when the country will achieve the criteria of joining the eurozone. The best case scenario is 2028. This is not the case for the Schengen area. In July 2021 the European Parliament reiterated that Romania and Bulgaria meet all the technical requirements and should receive full membership of the Schengen zone. The EP’s position has also been backed by the European Commission. This is not the first time that the EP endorsed Romania’s entry in the Schengen area (the EP adopted similar documents in 2011 and 2018). However, in September 2011 the Council of ministers (France, Netherland, and Finland) opposed Romania’s entry on grounds of systemic deficits in the fight against corruption. The main justification of this veto concerned thus a sui generis and uncodified connection between the Schengen agreement and the CVM. While France’s position has shifted, Germany, Finland, and the Netherlands continue to be opposed. The official position of the Romanian government has been that the country has met all the Schengen criteria since 2011. Nevertheless, the Dutch Prime minister Mark Rutte continues to issue concerns about the rule of law in Romania – as the EC pointed out – “politically” linking two different EU mechanisms. Alternatively, on the domestic scene, there is a widespread, yet diffuse view that the Netherlands’s veto is directly connected with economic interests (after joining the Schengen area, Romania’s port of Constanța would become the main competitor of Rotterdam).
All in all, Romanian parties remained overall compliant with EU institutional demands. Parliamentary parties did not push for any forms of policy differentiation or intra-EU differentiation. This is due to high levels of support for the EU and EU institutions both in public discourse and in political parties. Until the last elections of 2020, there were no Eurosceptic or radical parties in the Romanian Parliament.
- Intra-EU Differentiation
Romania is a part of the Three Seas Initiative, which reunites twelve of the EU members states, situated between the Baltic, Black, and Adriatic Seas. In 2018, Bucharest hosted the third summit of the Initiative with an agenda dealing with transportation, energy, and digital development. The participants in the summit established a list of priority interconnection projects
- Covid-19 and the EU Recovery Fund
During the recent COVID crisis and ensuing debates, Romanian authorities rallied behind the vaccination efforts and implemented in a mimetic manner anti-Covid regulations. The COVID crisis started on 16 March 2020 with a highly restrictive state emergency which instituted a country-wide lockdown (Presidential Decrees nos. 195/2020; 240/202). On May 14, 2020, the Romanian government introduced the “state of alert”, which has not been lifted irrespective of the official statistics. This entailed continuous restrictions targeting the economic sector but also limitations on individual rights. The ongoing state of alert has been particularly criticized since it opened the door for direct allocations in the field of public procurement. In 2020, the National Anticorruption Directorate announced that they are investigating how the National Office for Centralized Procurement managed the governmental acquisition of healthcare equipment (worth about 800 mil. Ron, about 2 mil. euros).
While political consensus attended – with few exceptions – the management of the COVID crisis, the Recovery Fund brought new controversies. The Romanian “recovery and resilience plan” country proposal was not previously in Parliament and has not been cleared yet by the EU Commission. The submitted plan has been domestically criticized. In June 2021, the leader of the social democrats (PSD, the main opposition party) pointed out potential conflicts of interests, as some of the firms that participated in the drafting process had also been nominated in PNRR as recipients of funds. Currently, the Romanian government has either submitted or is working the final details of the revised version of the document (as there are conflictive accounts on the backdrop of the governmental crisis)and is waiting for the European Commission’s evaluation by the end of September 2021.
- Conference on the Future of Europe
The highly Europhile nature of Romanian post-communist politics is declaratory, not matched by a solid understanding of how the EU functions. The EP elections are second-order elections with little consequence on building a Europeanized agenda. There are virtually no substantial local debates on European politics and policies. In this context, the Conference on the Future of Europe debates are overshadowed by domestic politics. On July 13, 2021, the Romanian Presidential office symbolically organized a round table to mark the official launch of the national debate on the Future of Europe. Similar events were hosted by the Ministry of Foreign Affairs, within the European Institute of Romania. These are small-size, ‘decorative’ undertakings, met with little interest by the society.
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