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| THE WEEK IN REVIEW 21-27/06/2010 |
| (2010-06-25) |
| Last updated: 2010-06-28 14:48 EET |
The Romanian government has decided to increase the VAT from 19% to 24% and called on parliament to speed up the procedure of enforcing the laws on cutting state pay and recalculating special pensions. The measure has been taken after Romania’s Constitutional Court deemed as unconstitutional a 15% cut in pensions and in the magistrates' special pensions, a measure included in the austerity law package for which the government has assumed responsibility in parliament. In exchange, the Court has considered the decision to reduce state sector salaries by 25% constitutional. The austerity laws should now return to parliament, so that, within 45 days, the provisions which have been deemed unconstitutional be brought into line with the Court’s ruling. The Romanian government should limit the budget deficit to 6.8%, for Romania to further receive the payments agreed upon in the stand-by loan agreement concluded with the IMF, the EU and the World Bank. The IMF has psotponed the meeting scheduled for Monday, during which a decision should have been made in order to disburse a new payment of the loan granted to Romania.
On Wednesday, the Romanian government issued an emergency ordinance amending the fiscal code and introducing more taxes and charges to increase budget revenues. So, from July 1st, taxes will be levied on government vouchers for meals, nursery provision, holidays and gifts, on bank account interest payments, income from the capital market, from operations on the money or currency market, compensatory payments and copyright fees. Owners of numerous houses that are not rented out will see a 50 to 200% tax increase. On the other hand, the government has taken a few measures meant to support small and medium-sized businesses. Companies which create at least 100 jobs , down from 300 at present, and make an investment of at least 10 million euros, down from 30 million euros, will get non-reimbursable money from the Romanian state. State-owned and public companies’ spending on assets and services will be reduced by 20%. Furthermore, the latter will have to contribute 90% of their profit tax to the state budget, as compared to 50% at present.
President Traian Basescu has submitted to Parliament Romania’s national security Strategy, for debate in the autumn session. The main objectives of the strategy are the continuation of Romania’s modernization, the more efficient functioning of state institutions, the promotion of the rights of Romanians everywhere, and ensuring the country’s energy security. The strategy also lays down the risks and threats which the Romanian state is subject to, such as a smaller capacity of enforcing the law by certain state institutions, reduced administrative capability at central and local level, and the excessive politicizing of certain institutions.
Romanian deputies on Tuesday voted for the civil procedure code and the criminal procedure code, as well as for the revised version of the functioning Law for the National Integrity Agency. The Agency is in charge of investigating dignitaries’ incomes. As far as the criminal procedure code is concerned, the main novelty is the extension of the judge’s rights. The National Integrity Agency law has undergone changes, after in April, the Constitutional Court ruled that some of the provisions did not observe the Constitution. Deputies opted for just one type of statement, which contains personal information, and a personal identification number, differing from the previous version of the law. The information and the signature cannot be revealed to members of the public. The Agency’s competencies have also been modified. Besides carrying out analyses and assessing the information received, the Agency can also investigate the dignitaries’ assets.
German foreign minister Guido Westerwelle paid an official visit to Bucharest, where he met his Romanian counterpart, Teodor Baconschi. The two discussed ways to develop bilateral relations, mainly in the economic field. Westerwelle was received by president Traian Basescu, who underlined the importance of the visit, which is a precursor to the visit of German chancellor Angela Merkel, slated to take place in October. The German Foreign Minister also traveled to the central Romanian city of Sibiu, which was European capital of culture in 2007, to meet representatives of the local authorities and of the German community in Romania. Westerwelle’s visit comes as Romania and Germany celebrate 130 years of diplomatic relations.
The Romanian army has lost 2 of its soldiers, members of the multinational coalition in Afghanistan. They were killed during a patrol mission on the Kandahar highway in the south, on Wednesday. The explosion of a remote-controlled improvised explosive device hit the armored vehicle they were driving. The death of sergeant-major Dan Ciobotaru, 28, and of corporal Paul Caracuda, aged 36, brings the number of Romanian troops fallen in the line of duty in Afghanistan to 15. Bucharest first sent troops to join their US allies in Afghanistan in 2003. A further 53 soldiers have been wounded. Most of the 1,460 Romanian troops are currently deployed in the south of the country, which is a Taliban stronghold.
Romania has been battered by heavy rain, storms and flashfloods this week. Warning codes of all levels were issued almost every day. The authorities’ latest toll shows that several people lost their lives, hundreds were evacuated, while more than 1000 houses, thousands of acres of farmland, as well as national and county roads suffered flooding.
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