Page 47 - bne magazine March 2017 issue

bne March 2017 Cover story I 47
not trust the government to abandon its plans to change the criminal code. They are also demanding the resigna- tion of Grindeanu’s government, which they say has lost all credibility by its attempt to legalise theft from the state.
This has resulted in a stand-off, with Grindeanu saying he will not resign; in fact, the only member of the cabinet to step down so far is the author of the legislation, the justice minister Florin Iordache.
It is too early to say how this will affect the international investors that Bucha- rest is so keen to attract and retain. Many welcomed the extremely active fight against corruption under the DNA, which has also been commended by
the European Commission in its annual progress reports on new EU member states. An employee of one major Ger- man investor tells bne that his firm is taking a wait-and-see approach for now, but didn’t anticipate the kind of prolonged unrest that could damage the Romanian economy.
“The longer the protests, the more short- term damage can be expected to overall business sentiment,” Stephan Csaba, bond market/currency research analyst at Raiffeisen Bank International tells
bne. “At the same time, should the pro- tests become successful and calm down, including the related consequences for the coalition, Romania could even come out stronger from this crisis.”
In fact, the government’s decision to try to push through controversial legisla- tion by emergency decree appears to
be of more concern than the prospect of unrest. “It is extremely worrying for the business community and society
as a whole, that legislative pieces with such moral, societal and economic implications with immediate and long-term effects are adopted by the government without observing the minimum requirements of transparency in decision-making,” Amcham Roma- nia said in a February 1 statement.
“One of the greatest concerns for investors is that regulatory and politi- cal stability is likely to become more uncertain because the government has shown it is willing to govern in this method, passing legislation overnight with no consultation,” agrees Stina Hartikainen, associate analyst Europe at Control Risks. “In the longer term, this crisis has cemented the poor relation- ship between government and Presi- dent Iohannis, which is a concern for policymaking and broader stability.”
This is not the first time that Roma- nians have taken to the streets in huge numbers to protest their government’s actions. In both 2015 and 2014 mass pro- tests took place, again related to official corruption.
In 2014, the grievance was the failure of Romania’s then prime minister, Victor Ponta, and his administration to ensure sufficient voting stations for the Roma- nian diaspora (which generally favour centre-right parties over the PSD) in the presidential election. That resulted in
a last-minute swing away from Ponta, who was standing for president, and an unexpected victory for his rival Iohan- nis. A year later, the fire at the Club Colectiv nightclub in Bucharest, which ultimately claimed the lives of 60 young people, again brought people onto the streets chanting “corruption kills” and demanding the resignation of Ponta’s government.
This year’s protests are the latest, but also the largest, bringing Romanians out to mass rallies on a scale not seen since the fall of communism. It has proved once again that Romanians are no longer willing to tolerate blatant corruption, and are determined at last to see their country become a modern European democracy.
Bucharest, Romania - February 1, 2017: More than 250,000 Romanians demonstrated in the biggest anti-corruption protest since 1989. www.shutterstock.com
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