Romania: bad and good news from the EU periphery & social and trade union situation in CEE

24 June by Peter Damo

1. INTRODUCTION

The good news is that the much hated anti-social and anti-democratic Government that imposed some of the most aggressive Austerity measures in Europe long before similar measures would be taken in Greece, Portugal, Spain or Ireland, fell a couple of weeks ago following a motion put forth by the opposition in the Romanian Parliament. The new Administration is the Social-Liberal Union (USL), i.e. an alliance between the Social-Democrat Party and the Liberal Party. However, it is a matter of further debate and political development whether such event is just another isolated happening or it is part of a series of changes in Europe – Italy, France, Greece.

Since then, there have been talks on gradually returning to the salaries and allocations for under age children before the cuts, on eliminating the anti-Constitutional taxation of pensions and on lowering VAT for basic food products. At the same time, a new Ministry has been created for Social Dialogue – something which completely lacked during the past four years or so – the Minister appointed being former Secretary General of the largest TU Federation in Education in Romania. Apparently, signs are good, but the expectations of are high. Whilst the population is expecting to get back their salaries, pensions, allocations, and scholarships, Trade Unions are expecting a rapid and substantial modification of the anti-democratic and anti-social Legislation which was adopted illegitimately by the former neo-liberal Government by means of so-called Governmental Ordinances that by-passed the Parliament.

In terms of ongoing positive initiatives, probably the most important event consisted of organizing the JSC Ro 2 on 22nd of October 2011, where some 120 participants from 9 European countries gathered in the successful second replica of the European JSC as applied to the conditions and realities existing in Romania and the CEE Region. (www.conferintasocialareunita.ro ).

The JSC Ro 2 ended with the unanimous adoption of the Final Declaration.

The participant organizations and representatives demanded publicly for the very first time in Romania the rejection of the Austerity measures and policies, the necessity of a steadfast anti-Corruption campaign and of defending Public Services Sector, the over-taxation of the companies making annual profits exceeding 10 million Euro with a National Solidarity Tax, the over-taxation of all Euro-billionaires in Romania, the need for a Progressive Taxation system and for a Progressive VAT, as well as the introduction a Financial Transaction Tax and of a Parliamentary control on Financial and Banking Institutions.

The political aim of the JSC Ro was to submit the Final Declaration both to the Romanian Legislative and Executive. Unfortunately, the big bosses of the Romanian TU Confederations and Federations who participated, left before the adoption of this programmatic document and never signed it ever since...

The not so good news is that the agreements with the IMF as well as the financial treaties with the European Union are to be implemented further on by the new Romanian Administration in spite of previous remarks, made whilst in opposition, of renegotiating terms with the IMF. Before recently completing his mission in Romania, IMF High Official Jeffrey Franks declared that he is against lowering the VAT for bread and other basic food products. This only reminds about the ones interfering in the politics and social life of the countries in this region.

2. REMINDER ON AUSTERITY

2.1. A GENERAL REVIEW

Arguably, Romania is the European country where the most anti-social and counter-productive Austerity measures have been taken so far.

The Crisis, which was initially denied against all evidence both by the President and Government simply for populist and electoral reasons, turned out to be one of the worst in Europe.

When in early 2009 the political lie of the Democrat-Liberal Party (PDL) in Power could no longer be sold, it gradually turned out that the Crisis in Romania, as expression of the failure of the Neoliberal deregulatory management and overall Systemic Crisis, overlapped an already embedded multi-layer crisis caused by the imbalances of Mutant Capitalism in Romania.

2.2. THE AUSTERITY PLAN – ‘A SOCIAL AND CULTURAL GENOCIDE’

The Austerity Plan in Romania has many-a-time been named a ‘Social and Cultural Genocide’. The Romanian President-Gambler and his Government, the EU, and the IMF have jointly come up in the early 2009 with a primitive Austerity Plan consisting mainly of two pillars: the first meant contracting a huge loan of 20 billion Euros from the IMF and the EU due to be paid in seven years, with the consequence of shear increase of the national debt and long term impoverishing effects on the people; the second aimed at increasing State revenues by dramatic cuts of salaries in the Public Sector, of allocations, scholarships and pensions, whilst simultaneously increasing taxation: salaries were cut by 25%, pensions by 15%, scholarships and allocations for under full age children by 10%, and the VAT was raised from 19% to 24%. In fact, according to economists’ calculations, the real cuts amounted up to 40% of the salaries.

Examples: The Media revealed the shocking information that during the year of Crisis 2010, when implementing some of the most infamous Austerity measures, the Romanian PDL Government had, according to a Report of the Court of Accounts of Romania, expenditures exceeding 117 million Euros that can not be justified.

The so-called ‘solution’ of the Romanian Administration resorted to the aforementioned anti-social measures instead of approaching the real cause of the deficit, namely the national plundering of the Budget, of Economic and Natural resources. This plundering has been caused mainly by three notorious factors: private companies belonging to the Democrat Liberal Party (PDL) high officials and their political clientele doing business with the State under the political protectionism, fiscal evasion of such companies, and contraband performed under the very eyes of Customs high officials who are members of the same ruling political State-party or have been nominated by it.

Economists demonstrated that, if the Government had the political will to reduce by 25% private companies doing less business with the State, by 25% fiscal evasion of politically protected companies, and by 25% the contraband at the State borders, the budgetary deficit would be more than covered and, more importantly, there would have been no need to adopt anti-social measures of austerity.

Examples: On 26th of April 2011, ‘Eurostat’ made public their report on Romania’s public debt and budgetary deficit disclosing that some of the official data provided by the Romanian Government may be doubtful because of uncertain and unreliable data.

The problem is caused by the unclear situation of a number of huge State owned companies such as ‘Transelectrica’ Electricity Company, ‘CFR Marfa’ freight Railway Company, ‘Termocentrale Rovinari’ and ‘Termocentrale Mintia-Deva’ coal-produced electric energy company, and others.

All these companies have obscenely well-paid managers who are politically involved with the Democrat Liberal Party (PDL) in Power and who have sponsored their electoral campaigns with large amounts of money.

All these companies have huge debts to the State budget and operate inefficiently. Nevertheless, the salaries of the directors of such State companies amount up to staggering tens of thousands of Euro per month as reward for their political obedience.

Of course, the solution advanced by the Government consists of increasing the number of unemployed workers to save expenditures.

In early May 2011, the Romanian President, unofficial head of the PDL, came out publicly and, as if knowing nothing about the aforementioned, pointed to the ‘boyars’ leading the huge State companies.

Most appallingly, elements of the ‘Euro Plus Pact’, of the ‘Economic Governance’, of the Monti concept had been forcefully and undemocratically imposed in Romania some two years before they would be put on the table.

Firstly, in February 2011, the Government modified the former Labour Code into what has been named a ‘Slavery Code of the 21st century’ by dismantling the Constitutional right to have and resort to National Collective Bargains, by drastically diminishing the rights of Trade Unions to organize strikes and protests and to stand up for their rights in Courts of Law. At the same time, the rights and powers of managers and bosses have been increased in terms of controlling and firing workers. The official explanation for this new Law was related to the embellished European flexi-security policy.

Secondly, the Government replaced three important Laws – the Trade Union Law, the Collective Bargain Law, and the Labour Conflicts Law – by the so-called Code of Social Dialogue which does not spell about dialogue but rather about dictatorial monologue against Trade Unions and workers.

Examples: According to ‘Realitatea’ TV Channel the labour force in Romania declined dramatically ever since 1990. Thus, in 1990 Romania had a population of 22 million and 8.9 million workers. In 2008 it had 4.7 million workers, whilst in 2010 it had 4.3 million workers. The year 2011 proved to be the worst in the last 50 years: having a population of about 19 million, Romania has only 4.1 million workers.

Officially, Romania has over 2 million migrant workers scattered across Europe from Italy to Ireland and from Hungary to Spain, but unofficial sources say the real figure may be even double. Most of them are highly qualified workers and trained specialists who left the country to escape poverty and lack of perspectives.

Not long ago, the Romanian President publicly declared that those who do not like the conditions in the country should leave abroad.

Thirdly, every year, beginning with 2009, the Government passed a Government Ordinance by which they block and postpone all Final and Irrevocable Decisions of Courts of Justice issued in favour of Trade Unions and workers. This undermines the basic principles of a Lawful and Democratic European State, showing clearly that the Principle of Separation of Powers in the State, i.e. the Independence of Justice in relation with the Political Power, is under threat.

Examples: According to an IRES poll publicly released on 11th of June 2011 more than 60% of Romanians have their incomes lower and lower during the last 5 years, 27% of them have the same incomes, whilst about 12% declared to have higher incomes.

In May 2011 the inflation was 8.41% and prices of vegetables and other basic food soared.

‘PRO TV’ Channel revealed during prime time News on 5th of May 2011 that the inflation rate in 2011 would exceed 5.1%, that is 1% beyond prognosis.

According to a BERD poll publicly released on 29th of June 2011 more than 80% of Romanians are deeply discontented with their living standards, which is the highest negative percent in the entire European Union. At the same time, most Romanians believe that Democracy is undermined and they do not believe in the correctness of elections.

Beginning with 1st of July 2011, the gas price is to rise by 10% which would lead to an avalanche of price rising in all fields, including basic food.

Meanwhile, the Prime Minister declares defiantly and confidently that, according to Statistics data, the Romanian economy registered during the first months of the year an increase by 0.1%, which entitles him to assert that Romania is on the way out of the Crisis. After they plunged the country into Social and Cultural Genocide, the ruling State-Party PDL is cynically offering Romanians the ‘Promised Land of Good Life’ during the next year when, by coincidence, there will be held both local and Parliamentary elections.

The situation in Romania, which may well be a smaller-scale Neoliberal experiment to be exported and implemented throughout Europe, has been characterized by the following:

• governing illegitimately by by-passing the Parliament and trespassing the Constitution by means of enforcing so-called Governmental Emergency Ordinances instead of having democratically adopted laws in the Parliament;
• the enforcement of the main political lines of the Euro Plus Pact and of the Economic Governance package ahead of their adoption at the European level;
• undermining and dismantling the only force in the society that put up a significant opposition to the Austerity plans, namely the Trade Unions;
• fragmentation of the Romanian society and driving it into deep impoverishment and social insecurity;
• undermining the Principle of Separation of Powers in the State by attempting to wipe out the Independence of the Judicial System and bring it under Political Control so as to issue anti-democratic Laws and even change the Constitution in favour of the President and his State-Party;
• tendency towards Mutant Capitalist Dictatorship by enthronement of a single State-Party lead by a Father-Figure strongman that smash any opposition and have no regard to the people whilst derailing from the fundamental Principles and Values of Constitutional Democracy and Human Rights.

3. STATEMENTS ON CRISIS, POLITICS AND CORRUPTION

3.1. There is a connection between the elements of the triad Politics and Power vs. Crisis and Austerity Measures vs. Corruption.

Apparently, Austerity Measures have been taken in order to counteract the Crisis. In reality, Austerity Measures directed against people have been preferred by Governments instead of other means of combating the Crisis which would have prevented the very political class in Power and their clientele from illegally thriving on.

Consequently, for the sake of political protectionism, no active legal solutions were taken to stop the ever increasing Debt and Deficit and the ransacking of the national resources. In other words, abuse of public power leads to unfair redistribution of national wealth, unemployment, impoverishment, segregation and fragmentation of society.

3.2. In spite of being well aware of such realities, the European Union bodies seem to have been tolerating corruption at national levels for the sake of implementing their own policies by precisely making use of the corrupt political authorities in some countries.

3.3. Corruption has been instrumental in the implementation of the ‘Grand Privatization’ of Public Services and Common Goods, i.e. energy production and distribution, transportation, mining, health care, education, etc, imposed by the EU and IMF in Central-Eastern Europe, serving both the EU strategy in the region and the immediate interests of the corrupt political authorities in charge.

3.4. Rising Corruption in some regions of the European Union, i.e. Central-Eastern Europe, does impact the whole Europe by generating democratic deficit, less social protection, soaring debt and deficit and, ultimately, more submission to policies imposed by the EU bodies, the ECB, and the IMF. Thus, some countries fall into becoming ‘experiment laboratories’ whose results, eventually, would be enforced throughout Europe.

3.5. In terms of Corruption there is a general similarity between Central-Eastern countries. This relates to historical, political, economic and psycho-social causes as well as to means of operation and effects.