The European Commission (EC) expressed concerns related to the impact of the latest economic policies pursued by Romania: the emergency ordinance OUG 114/2018, endorsed by the Government as well as the three laws on the banking sector passed by the Parliament in December 2018.

EC vice-president Valdis Dombrovskis and European Commissioner responsible for Economic and Financial Affairs, Taxation and Customs Pierre Moscovici sent a letter inviting Romania, on an informal note, to more transparency in the decision-making process by systematic application and effective use of impact assessment and consultation and involvement of the stakeholders, local Hotnews.ro reported. The two officials invoked as well the European Semester report issued last week by the EC, which included similar concerns and recommendations on a more formal note.

The concerns cited by the two commissioners are related to “the potential impact of these measures on financial stability, on Romania's ability to finance long-term investments, the development of the capital market and the efficiency of monetary policy.” It is eventually the real convergence and the standard of living that will get hurt, they argued in a last-minute attempt to convince Romania’s Government.

Specifically, the EC officials invited to more consideration relate to three key areas: the extra tax on financial assets (in OUG 114), the new banking regulations (the three bank laws endorsed on December 18), and the second pillar of the pension system.

The Senate has passed by default OUG 114, but the Government reportedly asked S&P rating agency for a two-week delay on its final rating decision implying that OUG 114 might be amended. Nonetheless, advisor to PM Viorica Dancila, Darius Valcov, in a TV show at Antena 3, quoted by Hotnews.ro, explained that nearly nothing of the OUG 114 should be changed. He argued in favor of every provision of the OUG and let little if any room for consultations with stakeholders, which are most likely going to be formal.

editor@romania-insider.com

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