The decade of the Barons. How did Romania sacrifice its development under SDP rule
2019 looks likely to be another year lost for Romania’s development, just like the Centenary Year, just like the past six years with the SDP in power. The government and the coalition are preparing new salary increases for public servants, pension increases, but zero investments that would bring added value to the economy. Another hint of missed chances: three years after the “Colectiv”disaster, investments in hospitals’ burnt sections are minimal at best, and the state, controlled by the SDP is helpless.
The southern and eastern parts of the country are isolated from its western parts and Europe because of the infrastructure,many big projects being killed before they start. The labor market has reached the point of breaking because of inflexible taxation, companies suffocate without labor and no roads to transport their products, the education system no longer produces sufficient resources.
Instead, local barons and budgets grow harmoniously and consume the majority of state resources. There have been six years of stagnation for Romania, exactly after the Boc government ordered public finances by eliminating special pensions, banning the cumulative retirement and jobs in the public sector, and freezing hirings by the same. Next year we shall enter the seventh year of SDP rule, the longest time a party has been in power, and we can no longer resort to a difficult legacy to explain its impotence.
2013 was the first year when the SDP broke the balance. Under the pressure of the barons who were starved under opposition rule Victor Ponta gave in to taking money away from large investments and channeling it to footpaths, bike lanes, and hundreds of small projects from which the barons drew their important part. He also „benefited” from the support of some catastrophic ministers, such as Dan Şova, who also destroyed the remaining projects.
Dacian Cioloş did not manage to change anything in 2016 from this system built for barons. He has not changed any of the budget structure built by SDP for SDP, he has not bothered Liviu Dragnea and his extension in the government, Vasile Dancu.
The successive governments inherited by Liviu Dragnea led to the peak of stagnation. Depending on the barons he manages with his carrot and stick, Dragnea shared the money from the budget according to their needs and the SDP’s, not society’s needs. Large investment projects have been postponed and changed up to the point where Corina Cretu, the European commissioner backed by the SDP, was also exasperated.
Conscious that European funds bring about the danger of transparency, as in the case of Teldrum, Dragnea – advised by Darius Vâlcov – invented the fantasy of public-private projects, a strange animal, that postponed further projects that had just been agreed (the Comarnic-Braşov motorway). It is an unfeasible solution for a simple reason: PPPs are based on the total trust between the public partner (firm) and the state, and something like that does not exist in Romania.
The SDP has done one good thing in the past two years: faced with massive exodus and depopulation of hospitals and schools, the salaries of doctors, nurses and teachers were increased. The problem is that the gains have been lost in the vast salary increases that have been given indiscriminately to all budgets, regardless of performance and efficiency. So, thousands of party insiders, relatives, and mistresses, poster hangers with cosy positions, have benefited from huge wages. Another problem is that investment in the act of education and the medical act are lagging behind; no one is educating teachers in line with the new requirements.
With regard to major investments, the years 2017 and 2018 brought an avalanche of promises, but the balance in the field is catastrophic. No big investment inaugurated, not even initiated. All the money goes to the barons and their hungry companies, plus the party clientele at the top.
2019 looks to be worse. An electoral year in which the salaries of the public servants increase by 25% and the pension fund increases by 8.4 billion lei through the new pension law released on 1st of September 2019. In order to get some money for the budget, ALDE is preparing to raise the minimum wage (towards the despair of the private environment), but also to increase excise duties.
An additional problem is the fall in consumption and the obvious slowdown in economic growth, which will further complicate the money-sharing task. Statistical data shows a decline in real estate transactions (July, August, September) for three consecutive months, which will lead to a slowdown in the construction market.
Constrained to remain within the deficit target of 3% of GDP and under the pressure of yet another wave of pension and wage increases, the SDP will sacrifice investments for another year. The prospects for 2019 are horrendous: another lost year, a year in which electoral presents will flow, the salaries of the public servants and the pensions will eat the shadow of money left in the budget. Another year in which hundreds of thousands of Romanians will leave the country like the plague, aware that the SDP is slowly grinding down their years and lives.
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