Weekly Policy and Political Report, May 23-29, 2017
The matter of the proposed Government reshuffle appears to stir discussions in the ruling coalition. As the Government assessment begins on Monday, May 29, as announced by PSD Chairman Liviu Dragnea, in the background, political sources including Social Democrats, as well as pundits have fueled speculations over the break between PSD's Dragnea and ALDE's Călin Popescu Tăriceanu on the one hand, and PM Sorin Grindeanu on the other hand. At this point, the reshuffling proposed by Dragnea meets the reluctance of PM Grindeanu, who would not replace members of the cabinet just six month into the term and after the reshuffling that took place after the February street protests. Sources from PSD stated for Adevărul daily that Dragnea and Tăriceanu proposed a shortlist which includes: FinMin Viorel Ștefan, MoH Florian Bodog, MinEdu Pavel Năstase, MinDef Gabriel Leș, as well as Ministers of Justice and Energy, Tudorel Toader and Toma Petcu. Quoted political sources stressed that the reshuffling has become a bone of contention in the relationship between PM Grindeanu and the PSD-ALDE ruling coalition. On the other hand, the same political sources brought president Klaus Iohannis into the picture, arguing that the PSD-ALDE majority would be unable to replace PM Grindeanu unless Iohannis accepts it, and there are signs that the President would not.


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Progress Report on Fiscal Policies May 24-29, 2017
On May 24th, the International Monetary Fund released the 2017 Article IV Consultation Report. The press release accompanying the report states that Romania saw strong economic growth in 2016, and it is expected to reach 4.2% in 2017.             According to the report, the main risks for Romania’s economic outlook are the weakening of fiscal prudence or of relevant institutions, an issue which could affect market confidence. The fiscal relaxation together with heightened political tensions could have a negative impact on consumption and investments, could increase the cost of government borrowing and put pressure on the exchange rate, which would lead to issues with the banks’ balance sheets. The document says that without structural reforms for supporting higher investment, the growth rate is expected to hit a plateau.


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Progress Report on the Priorities of the European Commission, May 17 -24, 2017
At the beginning of last week, as well as this week, Liviu Dragnea brought up the subject of a potential government reshuffling. On Monday, May 22, Dragnea announced that he would discuss with PM Sorin Grindeanu and ALDE President Călin Popescu Tăriceanu this week on this topic. The head of the Government is to meet with the leaders of the ruling coalition to assess the way in which the Government is enforcing the Governing program.     Last week, Dragnea was the one to put the prospects of a Government reshuffling on the table, while PM Grindeanu appeared rather supportive of his Cabinet’s activity and reluctant towards a reshuffling. Also aided by the positive economic results during his term, PM Grindeanu stated on May 17, referring to the reshuffling, that ‘no one changes players 15 minutes into the game when you are leading 3-0.”


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Weekly Policy and Political Report May 15 - 23, 2017
At the beginning of last week, as well as this week, Liviu Dragnea brought up the subject of a potential government reshuffling. On Monday, May 22, Dragnea announced that he would discuss with PM Sorin Grindeanu and ALDE President Călin Popescu Tăriceanu this week on this topic. The head of the Government is to meet with the leaders of the ruling coalition to assess the way in which the Government is enforcing the Governing program.    As PSD and ALDE’s leaders are preparing for this week’s meeting, Călin Popescu Tăriceanu’s party is going through changes. Former Minister of Education Sorin Câmpeanu announced that he left ALDE in order to join Daniel Constantin’s new political party. The new party will be officially presented in two weeks’ time. Sorin Câmpeanu’s decision is not singular within ALDE, as other members of the former Conservative Party (before merging into ALDE) decided to gather around Constantin’s new political party.  


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Progress Report on Fiscal Policies, May 16-23, 2017
The draft Prevention bill was adopted by the Government during the weekly Sitting held on May 18th. Minister Petrescu believes that the bill is a first step towards "emancipating the audit act", with a second step consisting in the voluntary compliance of the business environment, which is expected to improve the collection rate for state budget revenues. On May 19th, during a work visit, Minister for Public Consultation and Public Dialogue, Gabriel Petrea, said that the Prevention bill is not a normative act that concerns rights and liberties, but rather a bill designed to support employers and employees. On May 23, PSD leader Liviu Dragnea announced that together with PM Grindeanu, he decided that the Administrative Code would be introduced as a parliamentary initiative. Dragnea mentioned that he discussed the issue of local public finances with PM Grindeanu, and agreed on how to present the Local Public Finances Code to the National Union of County Councils in Romania (UNCJR). He added that both legislative proposals would be discussed with UNCJR. 


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