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ROMANIA: Government Collapse Deepens Economic Woes
By Claudia Ciobanu
BUCHAREST, Oct 5 (IPS) - Romania is heading for a week of massive protests by state employees. With the
governing coalition collapsing last Friday, the new minority government will
have a hard time navigating between the demands of the protesters and the
austerity measures demanded by its international creditors.
More than half of the 1.4 million state employees in Romania went on strike
Monday. They include medics and teachers, tax collectors, policemen, and
functionaries of local administrations. The 14 unions participating in the
strike have also called for a massive rally in Bucharest Wednesday.
The protests are about pay. State employees are unsatisfied with the
provisions of a new law adopted by the government which splits salaries of all
budget employees into five unified categories, effectively diminishing pay
levels for most.
The protesters are also going against some of the austerity measures
announced by a government struggling to cut budget expenses at a time
when the economic crisis has significantly reduced productive activity and
budget incomes. Romania's Gross Domestic Product (GDP) decreased by 7.6
percent in the first quarter of 2009, as compared to the first quarter of 2008.
Romania's budget deficit this year is expected to reach 7-8 percent.
This spring, the country contracted a 20 billion euros loan from the
International Monetary Fund (IMF) and European lending institutions. In
exchange for the loan, IMF asked Romania to introduce a series of austerity
measures aimed at balancing the economy and reducing the budget deficit.
In line with the IMF demands to cut expenses, the government decreed that
all state employees should take a 10-day unpaid vacation until the end of
2009 and that a significant number of state employees are to lose their jobs
in 2010.
The unions on strike dispute these decisions, which seem like isolated
sacrifices demanded from state employees when no overall strategy of
addressing the economic crisis is apparent.
The conflicts between the two parties making up the governing coalition were
one reason behind the weakness of the government in facing the crisis. Since
general elections in November 2008, the Romanian government has been
made up of the centre-right Democratic-Liberal Party (PDL) and the centre-
left Social Democratic Party (PSD). Ever since the IMF deal was announced, the
Social Democrats have argued against some of the austerity measures
involved in the loan, while the PDL sounded keen to promote budget cuts.
An unnatural alliance between political archrivals, the "grand coalition" finally
collapsed at the end of last week, under pressure of the upcoming
presidential elections. Both PDL and PSD will present their own candidates in
the November 2009 presidential elections, and preserving the governing
coalition while campaigning for different candidates proved impossible.
PSD Minister of Interior Dan Nica suggested last week that PDL would
attempt to manipulate the polls in favour of their presidential candidate,
incumbent Traian Basescu. Prime Minister Emil Boc from PDL consequently
asked for Nica's resignation, which led to all PSD ministers withdrawing from
government.
The country now finds itself led by a minority government. PDL received 34
percent of the vote in the November 2008 general elections, in a turnout of
40 percent.
Since the Socialist ministers left the government Friday, Prime Minister Emil
Boc has proceeded to distribute their portfolios to existing PDL ministers,
each of whom is now in charge of two ministries. Minister for the Economy
Adriean Videanu (PDL) has for example taken over the health portfolio too, in
spite of admitting he has no background in health management.
Putting PDL ministers in posts they are unfamiliar with is sure to put even
more pressure on already underperforming sectors. The European Health
Consumer Index, publicised last week, indicated that the Romanian health
system has the last but one worst performance in all of Europe. One reason
for the poor performance is the high frequency of changes in leadership and
policies; the ministry of health has been run by 18 ministers over the past 19
years.
"Starting everything from scratch with every new change of leadership, even if
the new leader comes from the same party as the last one, is a symptom of
the sickness of our political system," says political scientist and publicist
Cristian Ghinea. "Our parties do not focus on governing and on policy-
making. Instead, they stick to a mentality of being under siege and constantly
having to strike back against their political enemies."
PDL has replaced not only the resigning PSD ministers, but also heads of local
administrations and state secretaries that had been supported by PSD.
"The break-up of the government will cause additional political and social
instability," says political scientist Adrian Mosneag. "Up until now, even with
all the conflicts inside the governing coalition, with all the inefficiencies in
governmental performance and the growing social dissatisfaction, we have
not witnessed popular protests the size of those in Hungary, Bulgaria or
Latvia.
"But after PSD's leaving the government, it is likely that we will witness a
radicalisation of the protest movement caused by the law on salaries adopted
without involving the parliament, as well as by the poor general state of the
economy."
Mosneag does allow for the possibility that the new government will engage
in a rigorous path for reform, now that the political infighting with PSD no
longer represents an obstacle.
But many ask how strong a government can be that is chosen by less than 20
percent of voters, in front of protests that paralyse schools, hospitals, town
halls and tax offices across the country.
(END/2009)
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