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%.
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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