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| THE WEEK IN REVIEW 12-18/01/2009 |
| (2009-01-16) |
| Last updated: 2009-01-19 12:17 EET |
Justified by the new government in Bucharest as an attempt to cut expenses given the world financial crisis, the Emergency Ordinance forbidding people to benefit from both pensions and public sector salaries was ruled as unconstitutional by the Constitutional Court, after being challenged by the Ombudsman. The judges decided on Thursday that the ordinance breaches people’s employment and pension rights. The government says, however, that pensioners can supplement their incomes working by the hour, based on a short-term contract or in the private sector. According to Prime Minister Emil Boc, the ordinance merely tried to put an end to what he called the “shameless waste of public money”. The measure targeted the pensioners-employees who earn huge incomes in the justice, defence, home affairs and diplomatic areas.
The decision also affects actors, doctors, teachers and professional foster parents. The Prime Minister says his cabinet will comply with the decision of the Constitutional Court, but that it will continue fighting against luxury budget incomes and will initiate a draft law to regulate this area. Austerity is also the word that best characterises the new budget bill for 2009, which the authorities in Bucharest plan to send to Parliament for approval by the end of the month. The finance minister Gheorghe Pogea says the consolidated budget deficit this year will reach 2 to 2.5% of the GDP and that any allocation exceeding this level will be used exclusively for investments. While 2008 saw an estimated economic growth rate of 7.9%, this figure will not exceed 2.5% in 2009, says Pogea. This projection is based on an exchange rate of 4 lei for 1 euro.
The Association of Car Makers and Importers in Romania have announced that sales of new cars dropped by 53% in December, while the drop for the entire year 2008 stood at 14%. Only 4,000 cars were sold last month in Romania. The Dacia car factory in southern Romania, owned by the French group Renault, is expecting its lowest sales since the privatisation of the company. Dacia's employees came back to work this week after a one-month interruption, but the Dacia management say production will be cut again on the 26th of January for two weeks. The output reduction at the Dacia factories is likely to affect several other companies as well, which manufacture spare parts and components.
The National Bank of Romania has softened regulations for those who apply for loans. Credit institutions can calculate a higher debt rate for those who will guarantee for their loans with good quality real estate properties. The Central Bank has maintained, however, the measure according to which the loan repayment capacity will be calculated against an income level that cannot exceed 20% of the income in the previous year. The relaxation of loan regulations was operated at the request of bankers, and might unblock the real estate market.
The European funds for Romania, justice, the financial crisis and the energy issue were the main issues discussed in Brussels by Romania's president Traian Basescu and Prime Minister Emil Boc and the president of the European Commission Jose Manuel Durao Barroso. The Romanian president said Bucharest will send Brussels a proposal referring to the amendment of the public procurement law that will shorten the time needed to access community funds from 87 to 30 days. The European Commission confirmed it increased the amount of the first instalment of structural funds earmarked to Romania in 2009 from 515 to 768 million euros. Also, president Basescu mentioned that the goal of the new government is to convince Brussels to give up monitoring the justice system in Romania. Another issue discussed by the Romanian and European officials was energy, amidst the crisis generated by a cut in gas deliveries to Europe following the row between Russia and Ukraine. President Basescu said Bucharest backed unreservedly the development of alternative projects that could secure the supply with gas of the EU member states.
After holding the position of interior minister for three weeks, the Social Democrat Gabriel Oprea lost his party's political support when he appointed people the party didn't like in key positions in the ministry. As a result, Oprea resigned both from the ministry and the party. One of the most controversial appointments made by Oprea is that of inspector Virgil Ardelean as head of the interior ministry's secret service department, a position Ardelean had held before for 9 years and which he had resigned in 2006 following a scandal related to the fleeing of Omar Hayssam, convicted for terrorism. After Oprea's resignation, Virgil Ardelean also said he would give up his position as director of the General Home Intelligence and Protection Department.
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