TCS Daily

Romania's New Day

By Radu Nechita - December 15, 2004 12:00 AM

Traian Basescu - the mayor of Bucharest and candidate of the center-right coalition "Justice and Truth" - is the new President of Romania. Last Sunday, in the second round of the presidential elections, he defeated Adrian Nastase, the leader of the Social-Democrat Party (SDP) and prime minister for the last four years. This is an extraordinary victory for the reformist forces but optimism should be cautious.

The "Justice and Truth" coalition was formed by the National-Liberal Party (NLP) and the Democrat Party (DP). Both were in opposition during the last four years and their political programs are reformist and market-oriented. The same coalition won the local elections (June 2004) and, at the legislative elections (November 2004), obtained roughly the same number of mandates as the SDP. There are some reasons to consider this victory not only extraordinary but also unexpected.

The first is that during the last four years, the government adopted a very effective strategy to intimidate the opposition, to control the media and to "buy" the votes of the poorest citizens.

For example, public funds were distributed by the government mostly to cities and villages that had SDP mayors. The result was that many mayors elected in 2000 were forced to change their initial political affiliation to the SDP. The media (TV, radio and journals) were bought by members or close friends of SDP leaders. The "government friendly" media obtained advertising contracts from government entities, exemptions/postponements of fiscal duties, etc. The result was that SDP leaders and government members had an overwhelming presence on TV. The corruption cases were virtually ignored by TV chains and were presented only by two or three national journals. It wasn't enough to inform the population.

The second reason is that during the last four or five years, Romania registered some successes: admission to NATO, suppression of tourist visas for EU members, an economic growth of 4-5 percent, a reduction of the inflation rate, a slight improvement in personal incomes (at least in official statistics...). Not surprisingly, the government presented all these as a direct consequence of its policies and not as the result of western indulgence (for the political "victories") or the efforts of Romanians (for the economic advancements).

Basescu's victory was also unexpected, because the SDP significantly vitiated the results of the legislative elections of November 28. The European Union and the OSCE, among others, accepted these results despite the huge number of irregularities.

For these reasons, the victory of Traian Basescu is the victory of civil society and of the remaining free press against the government, against the power of the state. It is a victory of the reformist forces, because Nastase was supported mostly in the poorest regions, the rural areas, by older and less educated people. Basescu, on the other hand, received the support of younger and more educated people from urban areas.

But there are some reasons to moderate our optimism.

According to the Constitution, the President has limited powers. He has the right to choose the prime minister, but the government needs to be approved by the Parliament. The latter is composed of five parties in a structure that allows either a center-right or a center-left coalition, which means potential political instability.

The parties in the Parliament are:

The coalition "Justice and Truth", (NLP + DP), center-right (112 Deputies, 49 Senators); the SDP, left (113 Deputies, 46 Senators); the Party of Greater Romania (PGR), an ultra-nationalist, socialist, populist, xenophobic, anti-Semitic... well, a party that wouldn't be accepted by the EU (48 Deputies, 21 Senators); the Democratic Union of the Magyars from Romania, the party of the Hungarian minority (22 Deputies, 11 Senators); the Romanian Humanist Party, Social-Liberal (sic!), without a clear ideology: its members describe themselves as "social-liberals" (19 Deputies, 11 Senators).

In the coming days, we will find out the "color" of the future government. Any coalition will be unstable and will face a very strong opposition. This is a situation very close to the ideal of a limited government, but it also means many important reforms could be postponed or blocked.

In any case, foreign policy will be the same: Romania will continue to be an active NATO member, accession to the EU will remain the priority, etc. The main differences are in economic policy.

A coalition lead by the SPD will promote the same oversized welfare state, a relatively high level of taxation, transfers to the political clientele (not necessary the poorest people). However, the SDP promised to reduce the corporate tax from 25 percent to 16 percent. Another promise is to reduce the taxation of personal income, but the SDP is totally opposed to the flat tax.

The latter topic was one of the major points of disagreement during the campaign. Indeed, the "J & T" coalition supports the introduction of a flat tax of 16 percent on personal income and a reduction of corporate tax. This would be a very useful measure because Romania faces a strong fiscal competition from other Central and Eastern countries, which already adopted the flat tax or intend to adopt it soon (the Baltic States, Russia, Poland, Czech Republic, Slovakia, Bulgaria, and so on).

If the "J&T" party forms the right coalition, we can expect a progress in the reform of justice, and less political pressure on the mass-media. This week we'll find out the way chosen by Romania for the next four years.

Radu Nechita is Senior Lecturer, Faculty of European Studies, Cluj-Napoca, Romania.


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