Weekly Policy and Political Report November 13 – 20, 2017
The no-confidence vote initiated by the National Liberal Party and signed by USR and PMP was read in the joint plenum on Monday, November 20. The motion directly targeted Liviu Dragnea and PM Tudose for the lack of investments, proposed fiscal and judicial reforms. There are slim chances that the motion passes, as neither national minorities, nor UDMR offered their support. The motion has raised a number of 148 signatures, insufficient for toppling the Government. At the end of the sitting, Chamber of Deputies Secretary Ioana Bran could not provide a date for the vote on the motion.


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Weekly Policy and Political Report November 6 – 13, 2017
PSD's Liviu Dragnea is once again in the line of fire, as new charges of abuse of office and establishment of a criminal group in relation with Teleorman-based TelDrum have been presented by the National Anticorruption Directorate (DNA). On November 13, the Directorate announced in a press release that PSD chairman and Deputies’ Chamber Speaker Liviu Dragnea is being prosecuted over the establishment of a criminal group, abuse of office and financial improprieties while he was chairman of the Teleorman County Council. Eight other persons linked to TelDrum are also under investigation. According to DNA’s release, the case was opened based on a complaint from OLAF (European Anti-Fraud Office) sent on September 30, 2016, due to suspicions over illegal obtainment based on misinterpretations of European funds for rehabilitation works on county roads. Weeks before the adoption of the Budget for 2018, the ruling coalition could be facing a vote in Parliament over the immunity of Deputies’ Chamber Speaker Dragnea. So far, DNA did not give any signs of an eventual request to lift Dragnea’s immunity, but it would not be a surprise such a request is submitted in Parliament. However, if it comes to that, the opposition is unlikely to raise the votes for Dragnea's immunity lift. Similarly, PNL’s no-confidence vote has close to no chance to pass in Parliament.


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Weekly Policy and Political Report October 30 – November 6, 2017
President Klaus Iohannis held a press conference on Thursday, November 2, one day before the announced Special Government Sitting dedicated to fiscal reforms. Iohannis’ take on the proposed fiscal reforms was that the Government should put an end to the “fiscal mega-hopping” in order not to push Romania in a "fiscal adventure" with a sad ending. The special Government sitting was then postponed for Monday (November 6), and then suffered another two-day postponement. By Monday (November 6) it was not entirely clear whether the Government would abandon fiscal reform plans or just postpone their adoption. As ALDE’s Tăriceanu pointed out, it was PSD's leaders, rather than the leaders of the ruling coalition who met on Monday. PM Tudose stated on Monday that it is not certain whether the Government would address the fiscal amendments during the Sitting scheduled for Wednesday, November 8.


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Weekly Policy and Political Report October 23 - 30
Weeks after the Government reshuffle, Social Democrats still have to publicly deny rumors about tensions and further changes in the structure of the Government. On Wednesday, October 25, PSD’s Liviu Dragnea denied rumors about poor relations with PM Mihai Tudose, while in his turn Tudose denied speculations that he plans to sack Minister of Labor Lia Olguța Vasilescu. Against the backdrop of the ruling coalition's attempts to contain the aftershocks of the Government reshuffle, PM Tudose proposed former PM Sorin Grindeanu for the position of president of the National Telecom Regulator ANCOM. Three days after his visit in Parliament to defend the Split VAT mechanism, FinMin Ionuț Mișa made headlines alongside Minister Lia Olguța Vasilescu at the Government sitting of October 26, as they announced a series of “Measures for stimulating the business environment and reducing the fiscal burden.” The same day, the Ministry of Finances put up for debate on its website a Draft Emergency Ordinance on the transfer of social contributions, taxes on revenus. The Ordinance transposes EU Directive 2016/1164, laying down rules against tax avoidance practices that directly affect the functioning of the internal market. In this regard, the normative act enforces a limit to interest rates' deductibility, exit taxation – in order to prevent base erosions, anti-abuse rules - and it introduces guidelines for Controlled Foreign Companies (CFC). National media was prompt to present these changes as nothing short of a `fiscal revolution.` It is worthwhile observing that these proposals happen at the same time with the drafting of the budget for 2018. The latest deadline presented for the submission of the Budget bill in Parliament was October 31, as PSD’s Liviu Dragnea announced on October 25. However, it is expected that the Bill is sent to the Parliament at a later date. In the context of discussions over the Government's `fiscal revolution`, protests of healthcare employees over their wages continued last week. As other protests may yet spark (transporters), the ruling coalition is in a tight spot, given that it has to ensure funds for pay raises, while keeping the deficit under 3%. The Opposition Save Romania Union (USR) elected Dan Barna new party president. Barna, a specialist in law and structural funds, was part of the Government led by Dacian Cioloș and served as Secretary of State at the Ministry for European Funds. These elections were not acknowledged by all party members, with USR’s former president and founding member Nicușor Dan refusing to acknowledge the validity and legitimacy of these internal elections. Whereas under its former president Nicușor Dan USR was an `umbrella party` that catered to all ideologies, from left wing progressives to liberal conservatives, Dan Barna positioned USR as a center-right wing party. According to Barna, his main goal is to shape the doctrine behind USR, which according to his views should be to the center-right, "the area of pro-European modernizing liberalism, explicitly supporting private initiative and economic development".


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Weekly Policy and Political Report, October 16-23, 2017
After last week’s Government reshuffle, the ruling coalition met on Wednesday, October 17, to decide which bills would be tabled in Parliament, by means of a parliamentary initiative, and which would be incumbent on the Government, to be adopted by means of governmental procedure. The Justice Laws (a set of legislative amendments meant to alter the procedure for appointing prosecutors, introduce new rules for the Judiciary Inspections, magistrates’ liability and so on), the Public Procurement Laws, and the Sovereign Fund for Development and Investments were also included by PSD Chairman Liviu Dragnea on the list of priorities that the ruling coalition needs to decide how to adopt. At the end of the meeting, ALDE’s Călin Popescu Tăriceanu confirmed that the Justice Laws would be submitted directly to Parliament. Apart from the aftershocks of the Government reshuffle, the ruling coalition also faces waves of protests. Healthcare Unions went through the eighth round of negotiations, unsatisfied with the wage increases enforced through the Unitary Wage Law after the transfer of social contributions, and so far it appears that negotiations were inconclusive. Earlier this week FinMin Mișa underlined that Unions’ demands will never be met. Transporters also announced protests for November 3. Against the backdrop of social turmoil, the Government is preparing to unveil the final form of the Social Dialogue Law. On Saturday, October 21, Minister for Public Consultation and Social Dialogue Gabriel Petrea announced that his ministry is getting closer to reaching the final form of the Social Dialogue Law. On Monday, October 23, minister Petrea met with unions and employers for a final round of discussions. After consultations, the bill will go to the Parliament, According to minister Petrea, the law is to come into effect next year.  


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