Global Issues
ROMANIA: Government Collapse Deepens Economic Woes
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.
© Inter Press Service (2009) — All Rights Reserved. Original source: Inter Press Service