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| THE WEEK IN REVIEW 18/01/2008 |
| (2008-01-19) |
| Last updated: 2008-01-23 16:27 EET |
Romania’s proposals for changing the controversial car first registration fee were seen by Brussels as being “in agreement with the relevant European legislation”. Here is Romanian minister for the environment and sustainable development, Attila Korodi:
“Representatives of the European Commission made two or three comments on certain coefficients, but not on the principles that we have implemented. The law that will be issued in the last week of January will be what the European Commission expects.”
The tax that incurred criticism from the EC was introduced in early 2007, after excises on car imports and purchases on the Romanian domestic market were eliminated. The tax was calculated according to engine capacity, emission standards, and the age of the car. In Brussels, those rules were considered discriminatory against second-hand cars imported from European community states, and Bucharest was called upon to reconsider the law. Last November, the European Commission started the infringement procedure against Romania, and subsequently the Government in Bucharest announced it would change the law through an emergency executive order. The amount of the first registration tax is going to increase by almost three times for new cars and drop proportionally with the age of vehicles of the same cylinder capacity and the same Euro pollution level.
The 17th of January was the deadline for employees of up to 35 years of age to subscribe to a private pension plan. They are obliged by law to do so, while for employees between 36 and 45, the plan is optional. Those who do not subscribe in person, or who have signed up for more than one pension fund , will be randomly allocated a provider. There are 4.5 million workers insured in the public system – 2.6 million under 35, and 1.9 million aged between 35 and 45. By January the first 2008, 3.2 million had subscribed. Of the 18 pension fund management companies on the market, five are major players, holding 83% of the private pension market, with the top two firms controlling half of it.
This week, the Romanian currency continued to slide against the Euro, reaching its lowest point in almost three years: 3.7 lei per Euro. Food industry managers have already announced they will be raising prices soon, first for bread, then for meat and dairy products. According to the National Food Industry Trade Union Association, the drought of 2007 will make grain and meat imports necessary. This being the case, along with the depreciation of the leu and the rising utility prices, it is expected that food prices will go up by 10 to 15%.
President Traian Basescu has approved the initiation of criminal investigations against seven former ministers, and against a standing minister, Paul Pacuraru, minister of labor. Adrian Nastase, former prime minister during the Social Democratic Party period of rule between 2000-2004, is investigated for taking bribes and peddling of influence in a land purchase case, which also involves former transport minister Miron Mitrea. Mitrea stands accused of taking bribes, conspiring to forge documents, using forged documents, and corruption related activities. Traian Basescu has also ordered investigations into the activities of former justice minister Tudor Chiuariu, from the national liberal party, and communication minister Zsolt Nagy, from the Hungarian ethnic union party. They were accused of using their public positions for personal interest, in issuing an executive order which transferred ownership of a large building in the center of Bucharest from the Romanian state to the Romanian postal service, which was then used in a transaction with a private company.
Former minister of defense Victor Babiuc is accused of taking bribes and abusing his official position in a land transaction from 1999 between the Ministry of Defense and businessman George Becali, owner of the Steaua Bucharest football club. Former economy and finance minister from the Conservative Party, Codruţ Sereş, is accused of treason and espionage in the privatization process, and, from the Liberal Party, former agriculture minister Decebal Traian Remes is suspected of peddling influence, while incumbent labor minister Paul Pacuraru is accused of using his influence within state companies in order to gain contracts for the company headed by his son. On the other hand, the National Anti-Corruption Department announced the start of investigations into several football officials, such as club owners and managers, accused of fraud, tax evasion, and money laundering. 10 people in total are being investigated, accused of misappropriating over 10 million Euros between 1999 and 2005, from clubs like Dinamo, Rapid, Gloria Bistrita, and Otelul Galati. By not properly recording the transactions, the state lost almost 2 million Euros, while the Romanian Football Federation lost 600 thousand Euros.
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