The „greed tax” – PSD’s great failure. Dragnea’s conqueror aura is dimming and Vâlcov is one step closer to being ousted
Emergency decree 114, branded by PSD’s false Robin Hoods as the „greed tax”, was neutralized today by its very same prophets, who were seriously impacted after their head-on collision with reality. From an exemplary punishment administered to the business environment, emergency decree 114 has turned into a small ordinance which imposes new taxes in order to prop a fledgling budget. Most importantly, PSD’s defeat in the tough, behind-the-scenes struggle with companies and foreign partners carries a heavy symbol: Liviu Dragnea’s conqueror aura has lost its shine.
Let us perform a short recap. Emergency decree 114’s original formulation in December 2018 imposed a „greed tax” on banks, which was pegged to ROBOR levels; called for impossible capital increases for Pillar II pension fund managers ; obliged gas producers to sell cheaply to selected industry actors; imposed a generalized charge of 2% on turnover in the energy sector; invented a fee for telecom operators and drastic fines in the industry; changed the control mode of auctions involving European funds.
Three months later, PSD threw in the towel and gave up most of the above measures. It was a war of attrition started by Darius Vâlcov and Eugen Teodorovici. The latter even claimed that emergency decree 114 was „the most courageous and daring normative act after the Revolution” – a blasphemy stemming from the ignorance of a minister who became rich working exclusively as a state official.
The first signs of failure appeared in January. Tariceanu and his ALDE people understood they would lose control of the big state-owned energy companies and turned against the decree. The business environment showed unprecedented solidarity and spoke with one voice, be it representatives of foreign or domestic capital. The business environment’s public reaction, which did not hesitate in attacking PSD and, indirectly, Liviu Dragnea, assumed enormous risks, and was unprecedented.
Mugur Isarescu also attacked from all angles, keenly aware he was playing for his role and influence. Even Florin Georgescu, a PSD representative, showed support for the governor’s position and defended the banking environment, taking aim at the Dragnea – Vâlcov – Teodorovici trio.
On the other hand, external signals kept coming in, harsher and ever more pressing. OMV and ExxonMobil threatened they would not be investing in the Black Sea, and the European Commission warned that emergency decree 114 violated EU legislation.
One of the toughest moments was the call received on March 11 by Prime Minister Viorica Dăncilă from Steven Mnuchin, US Treasury Secretary. The government’s communiqué was lapidary and recalled only „bilateral cooperation, especially on the economic dimension.” According to sources from G4Media.ro, the American dignitary demanded the rethinking of emergency decree 114, warning that it was destroying the business environment.
Dăncilă was also questioned about the decree during her recent United States visit, where she met with major American companies (including ExxonMobil), but also with US Trade Secretary, Wilbur Ross.
Darius Vâlcov’s career counselor was at stake in all this. According to sources, Premier Dăncilă urged the party to extract Vâlcov from Victoria Palace, where the convict in the lower courts created a pole of power and influence rivaling that of Anca Alexandrescu. Vâlcov has become a real liability for Dancila, and his extended holidays are no accident, given the circumstances.
Defeat became apparent when the government practically begged Standard & Poor’s not to lower its rating prospect. The game was up, at least in terms of the bank asset tax.
A new defeat for the government came in the face-off with gas-producing companies, which it wanted to force to sell cheaply to a handful of industrialists, lead by the double convict Ioan Niculae and others close to the party. Today, this provision was sweetened, the obligation to sell cheap gas applying to households only. The overriding favoritism towards a criminal like Niculae, but also other notorious party clients, must have scared some of the government’s more discerning people, who might have remembered similar criminal files from DIICOT (Anti-organized crime agency), involving the same Ioan Niculae and other ministers among the defendants.
Defeat came also in the area of European funds, where the party wanted looser filters for easier theft. Faced with blocked auctions in thousands of projects, the government has modified Emergency Decree 114 stealthily, without announcing it explicitly.
What is left in the aftermath of this war between PSD and the business environment? Some aberrant taxes, much lower than the original ones, and the definite impression that the party cut off its nose to spite its face.
Seeing images of Eugen Teodorovici running away from journalists with his nose to the ground after suffering the torture of announcing himself the big failures of decree 114 constitutes enough proof. There is nothing left of the arrogance with which the same minister announced the revolutionary order last December.
There is nothing left of December’s anti-capitalist PSD outburst. The political spin of the decree was meant to launch the anti-Western nationalist discourse precisely before the European Parliament elections. But PSD’s narrative has just succumbed to its impact with reality.
When faced with the business environment, on a symbolic level, PSD appears weakened, vulnerable, and ready to yield under constant and legitimate pressure. Furthermore, Dragnea is running into a new obstacle: the great Sovereign Development and Investment Fund, which the party that has been struggling to set up for two years. A new failure on the FSDI will lower his popularity score and power among party ranks.
PS: One of decree 114’s greatest collateral damages is the silencing of a valid concern, which needs to be seriously addressed: the banks’ behavior towards the private sector, especially SMEs. If the business environment, the banking system and the government do not find a way to solve it, the funding crisis for local entrepreneurs will become a short and medium-term problem, with serious impact on the country’s development prospects.
Traducerea: Ruxandra Stoicescu
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