Wednesday, November 19, 2014

FT: Romania’s presidential poll offers hope for more tolerant future

Tony Barber

The result of Romania’s presidential election may turn out to be the most positive political event in Europe this year.

It is encouraging for what it says about three things in central and eastern Europe: its troublesome ethnic politics, the never ending struggle against corruption and the unfolding contest between the Euro-Atlantic alliance and Russia.

The election winner was Klaus Iohannis, the centre-right mayor of the city of Sibiu, who defeated Victor Ponta, the centre-left prime minister. What makes Mr Iohannis’s victory special is that he comes from Romania’s ethnic German minority.

After waves of emigration in the communist and post-communist eras, ethnic Germans account these days for well under 1 per cent of Romania’s 20m people. But the acrid aroma of menacing nationalism has often permeated Romanian politics, as the country’s Hungarian and Jewish minorities can testify.

Romanians showed exceptional maturity on Sunday by electing an ethnic minority candidate as their head of state. For many voters, the political programmes and personal appeal of the two candidates evidently mattered more than their respective ethnic backgrounds. It seems that this was especially true for Romanian voters who live in western European cities. They voted heavily for Mr Iohannis.

Few European countries, east or west, can say the same. Has Bulgaria had an ethnic Turkish president? Has Italy had a prime minister from its ethnic German region of South Tyrol? Has Britain had a premier of Afro-Caribbean origin?

In a region whose history is riddled with ethnically inspired political tensions, Romania’s election result gives hope for a future of tolerance.

The fact that Mr Iohannis was elected on what was perhaps the most explicitly anti-corruption programme of any Romanian presidential or prime ministerial candidate of the 24-year post-communist era, indicates Romanian voters are no less sick than the nation’s western allies of pervasive corruption in Romanian politics, business circles and public administration.

In early October Victoria Nuland, the US assistant secretary of state for European affairs, warned in a hard-hitting speech: “In central Europe today . . . the twin cancers of democratic backsliding and corruption are threatening the dream so many have worked for since 1989” – the year the region’s peoples overthrew communism.
As a centre-right ethnic German politician, Klaus Iohannis has excellent relations with Angela Merkel, Germany’s Christian Democrat chancellor

Official corruption is a deep-seated problem in Romania. One former prime minister, Adrian Nastase, has been convicted twice on corruption charges (after his first prison sentence, he shot himself in a failed suicide bid). The recent election campaign took place against the backdrop of an alleged bribery scandal involving top-ranking politicians and the sale of software technology licences for Romanian schools.

Mr Iohannis cannot change everything overnight, but his ascent to the presidency is a sign that the political classes are less likely to escape unpunished for flagrant abuse of public office.

His election victory should also stiffen the resolve of Nato and the EU to stand firm against Russia’s efforts to expand its political, military and economic influence in the Balkans and Black Sea area.

In some respects, Romania is less susceptible than its neighbours to Russian pressure. It relies less on Russian energy. As a non-Slav nation that once lost territory to the Soviet Union, it is immune to pan-Slavism and has few illusions about how the Kremlin deploys power. Yet from time to time one hears that high-level Romanian politicians have privately aired the idea of doing a deal with President Vladimir Putin that would concede to Russia permanent dominance over south-eastern Ukraine.

Mr Iohannis is unlikely to toy with such notions. As a centre-right ethnic German politician, he has excellent relations with Angela Merkel, Germany’s Christian Democrat chancellor. He sees eye to eye with her on the danger posed not only by Russia’s intervention in Ukraine, but by its support of the breakaway Moldovan region of Transnistria. Under Mr Iohannis, Romania can be expected to contribute to a more coherent, united EU stance towards Russia.

EurActiv: Incoming Romanian president plans to topple cabinet in 2015

Romania's incoming president Klaus Iohannis said yesterday (18 November) his party might try to topple Prime Minister Victor Ponta's government next year, an early sign of the instability that might follow his surprise victory.

A national vote is not due until 2016, but Iohannis, speaking in his capacity as leader of the centre-right opposition National Liberal Party, said his party might look to forge new alliances to unseat Ponta as early as next year.

Iohannis beat frontrunner Ponta in the weekend's presidential election, promising in his campaign to step up Romania's fight against corruption and make it a more attractive place for foreign investors.

He scored an early victory on Tuesday when parliament bowed to his calls to scrap legislation aimed at keeping politicians out of jail, which was introduced last year to relieve pressure on overcrowded prisons but sparked outrage.

While a Ponta presidency may have brought stability to one of Europe's poorest countries, a win for Iohannis means that executive powers remain split between rival political camps and could also pressure Ponta's government to bow out.

"We, the Liberal Party [his National Liberal Party is affiliated to the centre-right EPP political family], want to take over power. This will happen in 2015, or at the 2016 parliamentary election at the latest," Iohannis told reporters after a party meeting. "Now there is an urgent need for the 2015 budget because ... Romanians need to know what is going on."

The former communist state of 20 million is emerging from painful budget cuts imposed during the global slowdown. Growth rebounded to more than 3% in the third quarter of 2014, but corruption and tax evasion are rife. Progress to implement reforms and overhaul a bloated state sector is mixed.

Political squabbles have often hampered Romania's progress in its 25 years of democracy. Prime minister since 2012, Ponta often feuded with the outgoing president Traian Băsescu, which stymied policymaking and caused a constitutional crisis.

Ponta's Social Democrats and his coalition partners still have a comfortable-looking majority of nearly 60% in parliament. But Romania has a long history of defections and Iohannis' own party split from the government in February.

To contain the fallout from his defeat, Ponta on Tuesday replaced his foreign minister for the second time in just over a week, after voting problems for Romanians overseas triggered huge protests and helped turn the tide in Iohannis' favour.

Ponta nominated Mihnea Motoc, Romania's ambassador to Brussels for the last six years, to take charge.

Positive signal

Echoing several analysts' assessments, a note from Nomura on Monday said Iohannis' election was more risky for Romania in the short term. It heightened the chance of early elections and complicated talks for an ongoing aid deal with the International Monetary Fund.

"However, in the medium and long run, we believe there is a chance of a stronger credit story, while the government may actively tackle corruption and promote independence of the judiciary," it said.

The Social Democrats were dogged by several high-profile corruption scandals in the final weeks of Ponta's presidential campaign. Following his defeat, Ponta said voters had sent a clear anti-graft message and urged his MPs to reject the amnesty bill, which was originally proposed by a member of his party.

About 6% of all deputies and senators are either under investigation, on trial or already sentenced on graft charges, data from anti-corruption prosecutors showed. But on Tuesday, the lower house rejected the bill almost unanimously.

The decision might send a positive signal to the European Union, which keeps Romania's justice system under special supervision and out of the passport-free Schengen zone until its performance improves.

Romania: Last minute mobilisation makes Iohannis president

openDemocracy
CLAUDIA CIOBANU 18 November 2014

According to official results announced Monday morning, Iohannis managed to get 54 percent of votes while his main opponent, current prime minister and Social-Democratic leader Victor Ponta, got 45 percent. The counting of votes is still to be finalised, but Iohannis is expected to be confirmed as president on Tuesday. Ponta already conceded defeat Sunday night, saying that “the nation is always right”.

Iohannis’ victory was somewhat unexpected. In the first round of elections on 3 November, he had gotten around 30 percent of votes while Ponta scored 40 percent. Yet in the two weeks between the two rounds, Ponta’s opponents mobilised in an exemplary way both on the streets and on social media, leading to an increase in turnout from 50 percent to over 60 percent and in the reversal of scores.

In Romania, Ponta and his Social-Democratic party are seen by many as the epitome of corruption and inefficiency. Ponta has been a prime minister since 2012, a period in which his party peers supported legislation that would give immunity to corrupted politicians, criminalise investigative journalism, or give extraordinary powers to corporations in the extractive sector. The government also enforced a “special security zone” at Pungesti in eastern Romania where Chevron was doing exploratory work for shale gas allowing police to crush anti-Chevron protesters.

Ponta is also notorious for his lack of reliability: while in opposition, he criticised austerity only to implement IMF-dictated austerity measures once in power; before taking office, he opposed the Rosia Montana gold mining project that brought tens of thousands to the streets in 2013, only to get behind it as soon as he became a prime minister.

Yet the strong passions around these elections were not caused only by Ponta and the Socialists’ faults. There are two more factors to be taken into account.

For one, at the end of ten years with centre-right strongman Traian Basescu as head of state, the center-right electorate in Romania could look to new candidates and renew their hopes. The most promising of them was Klaus Iohannis, a Romanian of German ethnic origin credited with having done a stellar job as mayor of the city of Sibiu and representing an alliance made up of Romania’s two main centre-right parties.

Most importantly, Romanian society had changed in an important way during 2013. Last year, some of the strongest protests in Romania’s post-socialist history rocked the country and led to the indefinite postponement of a project to build a gold mine at Rosia Montana in Apuseni Mountains. During those demonstrations, many felt for the first time that they can and should make a difference to political life in their country. For some, the presidential elections this year constituted a major opportunity to see an electoral expression to the street movement.

On top of this, Ponta’s government made a serious mistake. During the first round of elections on 3 November, thousands of Romanians living abroad in Western Europe did not manage to vote despite sitting for hours in line in front of embassies, because of administrative problems. Because Romanians in Western Europe voted overwhelmingly for Iohannis, many thought their exclusion was a tactical move by Ponta’s government. Solidarity protests ensued in various Romanian cities, particularly in western Cluj, where more than ten thousands took to the streets one week after the first round.

Ponta’s government, however, did little to ensure the exclusion of Romanians abroad would not repeat in the second round. While more Romanians did get to vote in the second round (close to 400,000 compared to the first round’s approximately 200,000), images of people sitting in kilometre-long lines in front of embassies still circulated all over Romanian traditional and social media, stimulating those at home to get out and vote against Ponta.

Spirits have been very high in Romania over the past weeks. Ponta’s opponents, many of them important journalists and commentators who have the power to shape public discourse, depicted these elections as a fight of democrats vs. Ponta’s "communists", of good vs. evil, of a European future for Romania vs. getting stuck in the past.

This gloom and doom rhethoric was very much embraced by people active on social media and taking to the streets in various citites between the two rounds of elections. People felt the stakes of these elections were very high and that those supporting Ponta (traditionally thought to be the poor and less educated from rural areas or smaller towns) were dragging the country behind out of ignorance or out of short-sighted personal interest, because they accepted the Socialists’ electoral bribes.

Sunday’s results brought tens of thousands to the streets again across Romania. Among them, there are both people who voted for Iohannis as "the lesser evil" and those who are conviced that Iohannis is the way forward for Romania. While some of the protesters would have wanted them to stay focused on an anti-Ponta message, in most places people ended up chanting pro-Iohannis slogans. In Bucharest University square, Iohannis joined the crowds on Sunday night.

Excitement is high in Romania. But whether these elections are as miraculous as many Romanians taking to the streets these days think is doubtful.

For one, the president in Romania does not hold enormous executive power. The head of state can veto legislation approved by the parliament, is a guarantor of the Constitution, deals with foreign policy and can make some judicial and security services appointments. Iohannis will become a president, but Ponta will remain a prime minister (despite calls for him to resign heard on the streets Sunday night) and for now the parliament is still dominated by Socialists.

While Iohannis is seen as diametrally opposed to Ponta, the two were political allies in 2009 and 2012. The Social-Democrats may be corrupted, but neither do Iohannis’ Liberals have a spotless record.

Importantly, Romania has lived such "revolutionary" electoral moments before, when Traian Basescu was elected president in 2004 and when the first post-socialist centre-right candidate, Emil Constantinescu, became president in 1996. Yet the country has done little more than muddle through the post-socialist transition.

Iohannis’ political programme is a straightforward liberal proposition, putting forward the need to make the economy more liberalised and competitive, to support the business sector, maintain a flat tax, stick to European fiscal discipline. It proposes a strengthening of alliances with the EU, the US, and NATO. Iohannis may be credible when he proposes these things, but his proposals are nothing new to Romania. Nor is a simple pro-liberalisation line necessarily the most suitable for a country where 40 percent of the population is on the brink of poverty.

Just like other election rounds in Romania, this ballot too has hardly sparked any original thought on what the Romanian society really needs and whether this is all covered by the EU recipe. Most of the campaign has been fought in symbolisms.

What was positive in these elections was the strong mobilisation by people and the sense they had that they want to be involved in politics. Not having Ponta as a president is nothing to feel sorry for.

What is more problematic is that Iohannis represents a vision of politics that speaks only to those who are managing fine during the transition. Protesters, though many, were mostly representing this part of the population.

What is important right now is that Romanians continue to stay alert and keep an eye on power. And also that those who support Iohannis - and Iohannis himself - find ways to connect to the other part of Romania, the one that was not in the streets or on the internet, and who may have voted for Ponta out of fear of what the future may bring.

Bloomberg News: Romania Bucks Nationalist Wave With Election Shock

By Edith Balazs and Andra Timu 
November 18, 2014


When Romanians picked an ethnic German leader for the first time in 133 years, they did more than shock the frontrunner, Prime Minister Victor Ponta. They ran counter to a Europe-wide trend of rising nationalism.

The choice in 1881 was Carol I of Hohenzollern-Sigmaringen, the first German king of Romania. On Nov. 16, voters picked Klaus Iohannis as their new president, giving the mayor of the Transylvanian city of Sibiu a surprise victory over Ponta. The leader of the opposition Liberal Party erased a 10-point deficit in the first round two weeks earlier.

Iohannis, 55, will be the first member of an ethnic minority to be president in Romania, where relations with ethnic groups including Hungarians are often strained. His victory, driven by discontent with the government and a campaign focused on battling corruption, is a sign “that nationalistic tensions in Romania and the region may be overcome one day,” according to Otilia Dhand, an analyst at Teneo Intelligence in London.

“This is more dramatic than Americans electing Barack Obama,” said Charlie Robertson, global chief economist at Renaissance Capital Ltd. in London. “Electing someone belonging to 1 percent of a country’s minority is a sign of political maturity.”

Voters were driven by anger at thousands of their compatriots living abroad being unable to cast their ballots and the government’s “arrogant” response, Dhand said.

This “prompted Romanians to look beyond nationalistic lines and support Iohannis,” she said.

Ukraine Conflict

Iohannis triumphed as the conflict in neighboring Ukraine threatens to plunge back into open warfare and unleash a new wave of nationalism and separatism across the region.

Extremist and anti-EU parties gained ground at this year’s European Parliament elections. Radical groups made gains in countries including England, France, Denmark and Hungary, boosting their presence in the 28-nation bloc’s assembly.

In eastern Europe, a region peppered with minorities and criss-crossed by borders cutting through nationality lines, the proximity of the Ukraine crisis and the memory of the violent dissolution of Yugoslavia give an edge to ethnic tensions.

Hungary, Bulgaria and Slovakia are among the countries that have witnessed violent incidents involving local Roma, or Gypsy, communities in recent years along with a rise in the popularity of radical political groups.
Hungarian Minority

In Romania, tensions between the majority and ethnic Hungarians of more than 1 million run deep, often spilling into violence at sports events. Soccer fans regularly clash when the two nations play each other, such as at a Euro 2016 qualifier on Oct. 14, when almost 50 people requested medical care and 12 were hospitalized.

The Hungarian minority is pushing for autonomy in Transylvania, which the government in Bucharest rejects. Hungarians have gained some concessions in the past decade, including better access to education and some judicial procedures in their native language.

UDMR, their largest political group, has been in coalitions with parties across the political spectrum since the collapse of Communism in 1989. Currently part of Ponta’s alliance, Chairman Hunor Kelemen brushed aside expectations that Iohannis will be a “champion of minority rights,” even if a majority of Hungarians voted for him. Iohannis’s victory raises the risk that they will be seen as having unreasonable demands about minority rights, Kelemen said.

No ‘Paradise’

“It would be hasty to assume that his victory will bring on paradise in terms of minority rights,” Kelemen told the regional radio station Radio Marosvasarhely. “I wouldn’t have high hopes that Klaus Iohannis will solve minority problems.”

Iohannis promised “deep changes” in Romanian politics and pledged to preserve the country’s relationship with the U.S., the European Union and NATO.

He also called on the government to dismiss those responsible for the botched ballot abroad and asked outgoing President Traian Basescu to recall diplomats involved in the diaspora vote.

“Even though Romanians haven’t voted Iohannis for his nationality, but because of hatred for the government, he can still use his ties with Germany to his advantage,” said Alexandru Cumpanasu, an analyst at the Association for Implementing Democracy in Bucharest. “He must be wise though, because foreign politics have changed and he cannot just count on blood ties like Carol I.”

To contact the reporters on this story: Edith Balazs in Budapest at ebalazs1@bloomberg.net; Andra Timu in Bucharest at atimu@bloomberg.net

To contact the editors responsible for this story: James M. Gomez at jagomez@bloomberg.net Balazs Penz, Kevin Costelloe

Tuesday, November 18, 2014

Romanian president-elect: Deep change coming

BUCHAREST, Romania (AP) — An ethnic German mayor who defeated the prime minister in a runoff to become Romania's president said Monday his victory signals stronger relations with the West and greater stability for Eastern Europe.

Thousands of Romanians celebrated the surprise victory of Klaus Iohannis over Victor Ponta, which the mayor of Sibiu said would lead to "deep change" in Romania.

The victory of the slow-talking physics teacher represents a victory for a young, post-communist, well-traveled generation who get their news and views from social media, where Iohannis was widely favored, and not from the mostly pro-government traditional media.

It also reflected the anger that people felt over the problems that Romanians living abroad had in voting in the first round. The sight of thousands of Romanians, many forced to move away to find decent pay, lining up for hours to vote and being unable to do so, struck a deep chord. The turnout of 64 percent for the runoff was well above that in the first round.

Two hours after polls closed, an ashen-faced Ponta conceded defeat. A mass protest transformed into a celebration as Iohannis waded through thousands gathered in a square where many were shot dead during the 1989 anti-communist revolt.

"It should never be allowed again that Romanian citizens are humiliated when they want to vote," Iohannis told The Associated Press on Monday.

German President Joachim Gauck congratulated Iohannis, assuring him of Germany's support for "the implementation of important reforms your country faces — especially" in tackling corruption.

Iohannis tapped into Romanians' desire for a quiet life and an end to bitter conflicts between outgoing President Traian Basescu and Ponta, promising to be a "mediator president." Basescu also congratulated Iohannis.

His win was also the failure of the nationalist card played by Ponta, who mocked his rival's minority German ethnicity and the fact that he is a Lutheran and not a member of the powerful Orthodox Church.

Challenged to sing the national anthem at a news conference, Iohannis gave a tenor rendering of the first verse on Friday, to applause.

Ethnic Germans who moved to Transylvania 800 years ago enjoy a good reputation in Romania and Romanians are generally not bothered by religious affiliation.


Iohannis, a teacher, has been the successful mayor of Sibiu, a city of 155,000, since 2000.

In the interview, Iohannis said he would "definitely bring more assurances and stability to this region."

He promised to crack down on endemic corruption and guarantee an independent justice system and said Parliament must not pass a law that would grant amnesties to people serving prison sentences for corruption.

"All this needs to be done as soon as possible," he said.

Ponta later said that he would propose a law to Parliament that would not allow amnesties for corruption convictions, adding that he also supported changing rules for Romanians voting abroad.

Monday, November 17, 2014

Transylvanian surprise

The Economist

IN A world where politics often seem locked down by political scientists and campaign consultants, it is nice to be surprised once in a while. Opinion polls leading up to Romania's presidential elections on Sunday all predicted a clear victory for Victor Ponta, the Socialist prime minister, whose massive billboards and broadcast-media appearances had dominated the campaign. The polls were wrong. Romanians voted solidly for Klaus Iohannis (pictured), the no-nonsense mayor of Sibiu, a town in Transylvania.

Early results on Monday showed Mr Iohannis, an ethnic German who belongs to a Lutheran church, scooping up 54.5% of the vote. At a post-election victory party, supporters greeted him with cries of "Dankeschön". He will become the first member of an ethnic minority, and the first non-Orthodox Christian, to serve as president in Romania's post-communist history.

What the polls failed to predict was a massive bump in turnout. Participation was over 64%, far higher than in the first round of the elections two weeks earlier, which had narrowed the contest to a run-off between Mr Ponta and Mr Iohannis. In a press conference in Bucharest on Monday, a triumphant Mr Iohannis called the turnout "the best surprise of the elections”. The 55-year old former physics teacher took particular care to thank Romanians abroad for voting, or trying to: just as in the election's first round, many in Romania's large foreign diaspora queued for hours at polling stations in embassies and consulates, only to be turned away.

“Someone has to bear the consequences of this catastrophic vote organised abroad," Mr Iohannis said. In Italy and France, angry would-be voters clashed with local police, who used tear gas to disperse them. Mr Iohannis urged the outgoing president, Traian Băsescu, to recall Romania's ambassadors to those countries. Perversely, though, the voting problems outside of Romania seemed to have mobilised higher turnout at home. Solidarity protests with voters abroad were held throughout the week before the election, culminating in protests Sunday night in the cities of Bucharest, Cluj and Sibiu. Those protests turned into street parties for Mr Iohannis when Mr Ponta conceded his defeat, two hours after polls closed. Twitter and Facebook threads bearing election-related hashtags beside images of voters abroad clashing with police helped drive people in Romania to the polls.

Voting reform will be high on Mr Iohannis's presidential agenda. He urged the government to introduce legislation to introduce systems for voting electronically or by mail, rather than at polling stations at embassies. Currently, voters must cast their votes on printed paper ballots, which are then marked with an official stamp. Polling stations in London, Paris, Brussels and Rome had between three and seven stamps with which to mark the ballots of tens of thousands of people, restricting the speed of the voting.

Mr Iohannis has vowed to chart a strong Euro-Atlantic course for his country. On Monday he emphasised Romania's strategic partnership with America, and its roles in NATO and the European Union. While Romania's prime minister enjoys broad executive powers, it is the president who has the last say on foreign and security matters. As for Mr Ponta, he said he sees no reason to step down as prime minister, but would do so “in one to two years” if he loses his majority in parliament. But after his unexpected and decisive loss on Sunday, he will face increasing pressure, both from the opposition and from his own party, to resign.

Romania Opposition Chief Johannis Wins Presidency in Upset

Romanian Liberal Party leader Klaus Johannis erased a deficit of 10 percentage points to upset Prime Minister Victor Ponta and win the country’s presidency, a surprise result that threatens to unsettle the ruling coalition.

Johannis, 55, the ethnic German mayor of the Transylvanian city of Sibiu since 2000, got 54.5 percent of the vote to 45.5 percent for Ponta, gaining 2 million votes to reverse the premier’s lead in the first round two weeks ago. Ponta conceded defeat in a televised speech last night, even before partial results were announced. He said he won’t resign from his post.

Johannis is the first member of an ethnic minority to become president in Romania, where the majority’s relations with ethnic groups including Hungarians are often strained. After a campaign focused on a pledge to crack down on corruption and strengthen the rule of law, he rode an increase in voter turnout to victory.

“I will be a free president who will represent all Romanians,” Johannis, a former high school physics teachers who received praise for helping Sibiu became Europe’s capital of culture in 2007 by restoring medieval buildings, said in a televised speech. “The citizens gave a signal for profound change and I got this message loud and clear. I’m ready to start working.”

The leu gained 0.1 percent to 4.4245 per euro at 12:30 p.m. in Bucharest today, while the yields on the government’s euro-denominated bond due in 2024 fell 2 basis points, or 0.02 percentage point, to 2.75 percent, according to data compiled by Bloomberg.
‘Unseating Ponta’

About 64 percent of the 18.3 million eligible voters cast their vote, up from 53 percent in the first round, according to the Electoral Bureau. Social Democrat Ponta, 42, who can still lean on the ruling coalition’s parliamentary majority, is defying criticism over voting procedures for Romanians abroad and losing his first-round lead.

“Johannis will likely use the presidency’s influence over the majority in parliament to undermine Ponta’s government,” Tsveta Petrova, an analyst at New York-based Eurasia Group, said in an e-mailed note before the vote. He may seek “a government that is more business-friendly than the current governing coalition, though not necessarily able to change the course in the medium term.”
‘Political Fracas’

Ponta’s coalition, which includes the ethnic Hungarian party, has 358 lawmakers in the 572-seat parliament. It would control 315 votes without the Hungarians and other minority representatives, according to the legislature’s website.

“One shouldn’t rule out a political fracas in the period going forward and, possibly, a readjustment of the leftist parties’ strategies in Parliament,” Radu Craciun, chief economist at Erste Group Bank AG (EBS)’s Romanian unit said in a note.

Johannis urged the government to present a 2015 budget “as soon as possible,” called on parliament to reject an amnesty law and lift the immunity of lawmakers being probed by prosecutors. He also asked the President and Ponta’s cabinet to punish those responsible for the poor management of voting abroad, including the recall of some diplomats.

Several thousand people took to the streets in Bucharest and other cities last night to protest long lines at voting centers abroad and celebrate Johannis’s victory.
‘Will Pay’

“I want to show my children that we still live in a democratic country and that whoever insults our right to vote will pay the price,” said Rebeca Ion, a 40-year-old consultant, marching in Bucharest.

More than 10,000 demonstrators in Bucharest demanded Ponta’s resignation after television images showed thousands lining up for hours to vote in London, Paris, Munich and other cities in Europe. Police fired tear gas in Turin and Paris to disperse Romanians angry they weren’t able to cast their ballots before polls closed there, according to Realitatea TV.

“Ponta was defeated after annoying the urban electorate by failing to organize the voting abroad and showing too much confidence in his victory,” Cristian Ghinea, head of the Romanian Center of European Policies, said today by phone.

With economic growth exceeding estimates and a target to adopt the euro in 2019, Romanians voted to replace outgoing president Traian Basescu, who served the maximum two five-year terms. With Basescu at the helm, the country witnessed growth rates higher than China in 2008 and some of the toughest austerity measures in the European Union two years later in the financial crisis.

Corruption Scandals

In an election campaign that was clouded by corruption scandals and accusations by Basescu that Ponta was a spy before entering politics, which he denied, Ponta tried to boost his popularity by promising higher pensions and salaries. He quarreled with the International Monetary Fund and the EU under a 4-billion euro ($5 billion) bailout accord over a plan to cut social contributions by 5 percentage points.

The lenders put a planned review of the accord on hold in June and said they will resume talks with the government after elections to see the 2015 budget plan and proof that the measure is sustainable.

“There is a high chance that negotiations will prove tight this time,” Irina Cretu, an analyst at NBG Securities SA in Bucharest, said in an e-mailed note before the vote. “The assumed 2015 fiscal gap target stands at 1.4 percent of economic output, whereas the recent European Commission forecast shows Romania’s public budget deficit would increase to 2.8 percent next year.”

To contact the reporters on this story: Andra Timu in Bucharest at atimu@bloomberg.net; Edith Balazs in Budapest at ebalazs1@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net Kevin Costelloe

Incoming Romanian president pushes crackdown on corruption

(Reuters) - Romania's president-elect Klaus Iohannis urged parliament on Monday to scrap a corruption amnesty bill, moving swiftly to make good on a campaign promise and allay EU fears over graft in the country.

Iohannis will be sworn in as president in December after he inflicted a surprise defeat on Prime Minister Victor Ponta in polls on Sunday, a result that will maintain a potentially destabilizing split between the country's executive powers.

An ethnic German mayor whose campaign was backed by two center-right parties, Iohannis turned round a 10-point deficit to win the runoff comfortably, as widespread anger at voting problems overseas appeared to galvanize the anti-Ponta camp.

"I will prove Romania is a serious, credible and longterm partner," Iohannis told reporters at a press conference.

Analysts had said a victory for Ponta might have helped make Romania more stable, with the main levers of power held by one bloc. By contrast, although he distances himself from the outgoing president's combative style, Iohannis's win may trigger renewed political tensions in one of Europe's poorest states.

"The relationship between Social Democrat PM Ponta and center-right president-elect Klaus Iohannis will likely be strained," said Otilia Dhand at Teneo Intelligence.

However, the leu currency took the surprise result in its stride, edging up 0.1 percent against the euro at 1050 GMT/ 0550 ET, while three-year debt yields fell 3 basis points from Friday, hovering near record lows.

"In the near term, the political situation could be volatile, but in the longer term, a president from a different part of the political spectrum than the government ... could foster the fragile independence of the judicial system," bank UniCredit said in a note on Monday.

SAFEGUARDING JUSTICE

The election result was part of a pattern emerging in ex-Communist eastern Europe for voters to use the ballot box to stop any one group or individual from gaining too much power.

In Slovakia's presidential election in March, Prime Minister and frontrunner Robert Fico was trounced amid fears Fico and his center-left party would amass too much power.

The former Communist state of 20 million is emerging from painful budget cuts imposed during the global slowdown. Growth rebounded to more than 3 percent in the third quarter of 2014, but corruption and tax evasion are rife, and progress to implement reforms and overhaul a bloated state sector is mixed.

Prime minister since 2012, the 42-year-old Ponta often feuded with his rival, outgoing President Traian Basescu, which stymied policymaking and caused a constitutional crisis.

The 55-year-old Iohannis had promised during the campaign to safeguard the independence of Romania's judicial system and the fragile progress made in tackling corruption.

The European Union has raised concerns about a failure to tackle rampant high-level graft in Romania and Bulgaria, its two poorest members. Both have been kept outside the passport-free Schengen Zone since entering the EU in 2007.

During the campaign, Iohannis tapped into popular anger over a 2013 bill that allowed for amnesties in certain criminal cases, providing a judicial shield for some politicians.

He also pledged economic, health and education reforms, and to create an attractive business climate for foreign investors.

But Iohannis as president will, like Basescu, face a hostile parliamentary majority that could cause more policy wrangling.

An early flashpoint could be the 2015 budget, in which Ponta will have to balance spending promises made during the election campaign with an EU commitment to fiscal discipline. His government might also cut loose an ongoing IMF aid agreement that is due to expire next year.

NYT: In a Soft-Spoken Romanian Prosecutor, Some See an ‘Earthquake’

BUCHAREST, Romania — TELEVISION crews are on permanent standby outside the offices of Laura Codruta Kovesi, ready to transmit live images of the next episode of Romania’s most talked about and, for the country’s corruption-addled business and political elite, most terrifying drama in 25 years.

Unless they have jobs inside or another good excuse, nobody in Romania these days wants to be seen entering the wooden door on Stirbei Voda Street that leads to Ms. Kovesi, the soft-spoken 41-year-old who heads Romania’s National Anticorruption Directorate, a once-sleepy agency now leading an unexpectedly vigorous drive against graft-fueled thievery.

“This calm and self-effacing lady has become the most feared and, for some, the most hated person in Romania,” said Vladimir Tismaneanu, a professor of politics at the University of Maryland who headed a commission set up in Romania to examine crimes committed before the 1989 fall of the dictator Nicolae Ceausescu. Ms. Kovesi, he added, has set off the biggest “political earthquake” to shake Romania since 1989.

THOSE caught in Ms. Kovesi’s sights and their allies take a rather different view. They denounce her as a Stalinist and accuse her agency, which is known by its Romanian initials as D.N.A. and relies heavily on wiretaps, of reviving methods used by Mr. Ceausescu’s feared and omnipresent security service, the Securitate.

Ms. Kovesi, in an interview in her office adorned with religious icons, dismissed the allegation as absurd. She said that she and her team of prosecutors “graduated after 1989, so we have no idea what Securitate methods are.” Wiretapping, she added, was “not invented by D.N.A., but is used all over the world” by democratic countries with no history of Communist repression.

Her critics — notably a media group controlled by Dan Voiculescu, a political and business baron sentenced in August to 10 years in prison for corruption — have waged a relentless campaign to blacken her name and that of her agency.

Jurnalul National, a newspaper controlled by Mr. Voiculescu, called Ms. Kovesi Romania’s “Stalinist prosecutor,” while another of his properties, the Antena 3 television channel, likened her to Hitler as well as Stalin and accused her of taking money from a mobster.

Ms. Kovesi said she had grown accustomed to the slurs, noting that “the most negative attacks, the most defamatory statements, come from people who are being investigated by D.N.A.”

All the same, she filed a defamation lawsuit against Antena 3 in June over the mobster payment report and allegations about her private life as a single, divorced woman.

A tall former basketball player who works out regularly near her home in Bucharest, the capital, Ms. Kovesi shuns round-the-clock bodyguards but is watched over by the Protection and Guard Service, a state body responsible for protecting officials.

“I have a very normal life,” she said, shrugging off the risk. “I go to the cinema. I go to the gym.”

While playing down the fears she has stirred in Romania’s political class, she has decorated her office wall with a picture painted by a niece that features a scarecrow in a field shadowed by black birds. “They say that is me in Bucharest,” she said.

Ms. Kovesi said ordinary people she met never asked her to back off Mr. Voiculescu or others prosecuted by her anticorruption directorate. “Every time I go to the market, to the store or the cinema, I meet friendly people who congratulate me and who encourage the work we do here,” she said. “Not everybody in Romania commits corruption.”

Yet she acknowledged being dismayed that the general public, whatever its stated distaste for corruption, keeps voting for politicians suspected or even convicted of larceny. “It is extremely difficult to explain this contrast,” she said.

SET up in 2003, D.N.A. for years targeted only low-ranking state employees while giving big shots a wide berth.

“They were going after schoolteachers and train conductors. It was a mockery,” said Sorin Ionita, a policy analyst at Expert Forum, a research organization in Bucharest. This began to change a decade ago with the appointment of another woman, Monica Macovei, as justice minister, which was followed by legislation that prevented the agency from pursuing only small fry.

Now, all of the cases it investigates must involve bribes of more than 10,000 euros, around $12,500, and state employees above a certain level.

Romania’s Parliament has repeatedly tried to limit anticorruption efforts, with legislators complaining that they are being targeted for political reasons and proposing an amnesty law, a move Ms. Kovesi said she strongly opposed.

The mingling of politics with both corruption and the fight against it has become a particularly heated issue in recent weeks amid a presidential election, the second round of which will be held on Sunday. The vote will decide who replaces the current center-right president, Traian Basescu, who appointed Ms. Kovesi in May 2013. Mr. Basescu’s opponents saw the appointment as a move to ratchet up pressure on the Social Democratic Party of Victor Ponta, the center-left prime minister and the front-runner in the presidential election.

“Of course, there are lots of statements that we conduct political cases,” Ms. Kovesi said. “My answer is that we don’t open political cases.” She noted that her agency had brought corruption charges against members of many parties, not just Mr. Ponta’s, and had also jailed Mr. Basescu’s brother for taking money from a crime boss.

A CAREER prosecutor whose father was also a prosecutor, Ms. Kovesi studied law in the northwestern city of Cluj. After graduating in 1995, she took the first in a series of jobs in a Romanian justice system that the European Commission has regularly assailed as skewed by political interference and corruption. But despite much digging by her opponents, no solid evidence has come to light of any wrongdoing on her part.

The author of many articles on arcane legal issues and a recipient of commendations from the United States, Ms. Kovesi keeps a wall around her personal political views, avoiding the emotional hyperbole that often dominates public discourse in Romania in favor of clipped legalese.

Since Ms. Kovesi took over D.N.A. last year, what was a trickle of high-profile arrests and prosecutions has become a flood. Nearly all have ended in convictions, with her prosecutors recording a success rate of over 90 percent.

Her agency’s biggest scalp so far has been a former prime minister, Adrian Nastase, sentenced in January to four years in prison for taking bribes. He spent only six months behind bars, securing release for good behavior. But his conviction sent tremors through Romania’s political class, particularly the Social Democratic Party, to which he belonged.

Mr. Nastase’s trial was followed by a series of arrests in connection with the so-called Microsoft Case, a corruption saga involving the sale at inflated prices of Microsoft software licenses for use in Romanian schools. Nine former ministers are under investigation on accusations of taking bribes, though Ms. Kovesi said Microsoft “was not involved in any way” and was helping investigators get to the bottom of the affair.

So far this year, 16 legislators — seven senators and nine members of the lower house of Parliament — have been indicted, along with an army general, four prosecutors and 18 judges. Among those already placed in pretrial detention is Viorel Hrebenciuc, a Social Democratic power broker who was once considered untouchable.

“Nobody expected this to ever happen,” Mr. Ionita, the policy analyst, said. “It is unbelievable to see people like this put in jail.”

MS. KOVESI declined to comment on predictions by Mr. Ponta’s opponents that if, as expected, he wins the presidential race, he will rein in her work or replace her with a more malleable figure.

Mr. Ponta, in an interview, voiced no complaints about Ms. Kovesi’s performance, saying it had been his idea to appoint her in the first place. “She has been appointed on my proposal,” he said. “I see no reason to change anything.”

Ms. Kovesi has no illusions about the future. “It is important that the new president support the anticorruption fight,” she said. As long as this happens, “we have no reason to worry,” she added. “But there are reasons to worry if the president does not support our fight.”

DW: Romanian presidential candidate Klaus Iohannis - a pragmatic go-getter

In the run-off election for president in Romania, one very unusual figure has risen out of Transylvania. In his simple, direct way, Klaus Iohannis seeks to convince his countrymen with his former successes.

"Yes, we can!" was not a call he made to his voters. Rather, Klaus Iohannis' campaign slogans lauded a "Romania of thoroughness"and a "Romania of things well done." These sentiments carried the liberal-conservative to Sunday's run-off election for the highest office in the land.

In the first round of voting on November 2, front-runner Victor Ponta lead Iohannis by almost ten percentage points. In truth, the popular mayor from Transylvania ought to be called Johannis, with a J. Some Romanian functionary was obviously not familiar with the name when he filled out the birth certificate 55 years ago. And so it officially became Iohannis, a more Romanian-looking spelling for the candidate from the country's German minority.

Successful municipal leader

Iohannis' political rise can be attributed to the good reputation that's followed him for years. As mayor of Sibiu, he has already been reelected four times, each time with a comfortable majority of 70 to 80 percent. The former physics teacher is valued for how he fundamentally reformed and renovated the partially dilapidated medieval city. In 2007, Sibiu was recognized as one of the best examples of European integration: the year of Romania's ascension to the European Union, "his" city was chosen - along with Luxembourg - as European Capital of Culture.

The region is also booming economically. Hundreds of foreign investors, mainly from Germany and Austria, have settled there and helped to ensure that unemployment has trended towards zero. To compare: The overall unemployment rate in Romania, according to Eurostat, comes in at just over seven percent.

A self-assured go-getter

After his remarkable success in local politics, the Evangelical Lutheran and Transylvania Saxon now seeks to convince a nationwide majority that he is the right man to lead the political, moral, and economic regeneration of Romania.

"I am running because I wish to establish a new kind of politics on our country. Less show, less noise, and more concrete solutions for citizens, for Romania," Iohannis repeats convincingly in his interviews and at public events. Neither special interest groups nor media empires stand behind him, he stresses, drawing an allusion to his Social Democratic (PSD) opponent Ponta.

But a central question remains, a question Iohannis himself cannot answer. Is Romania ready for a politician who belongs to both ethnic and religious minorities? Today, only 40,000 ethnic Germans live in Romania - in a country of nearly 20 million. They are considered hardworking, trustworthy, honest and upright. Many Romanians appreciate these virtues, especially in the center and west of the country, where the ethnic Germans - also called the Transylvania Saxons and Banat Swabians - reside. This was seen in the first round of elections on November 2, when Iohannis emerged as the winner in these regions. But in the south and east of the nation, voters were clearly in favor of Ponta.

The Iohannis fairytale makes this round of competition all the stronger. People speak of the Iohannis-effect - just like they spoke of an Obama-effect in the US in 2008. "People are tired of the established politicians," Iohannis told an interviewer of his achievements in Sibiu . Whether the self-confident "go-getter" can score at the national level will be seen on Sunday.

NYT: Favorite Concedes Presidency in Romania

BUCHAREST, Romania — In a surprising turnaround, Prime Minister Victor Ponta conceded Romania’spresidential runoff election late Sunday night to the center-right candidate, Klaus Iohannis, the mayor of the Transylvanian city of Sibiu.

When the last votes were cast at 9 p.m., exit polls had the election too close to call, but soon after 11, Mr. Ponta told reporters, “I called Klaus Iohannis to congratulate him for his victory.” He added, “The people are always right.”

Official results were not expected before Monday morning.

Mr. Ponta, 42, had long been the favorite. He led Mr. Iohannis, 40 percent to 30 percent, in the first round, but with no one winning a majority in a field of 14 candidates the race went into a runoff.

The outcome of the runoff seems to have hinged on the large Romanian diaspora, estimated to number four million. In the first round of the election, which took place on Nov. 2, a large number of Romanians living abroad were unable to vote despite waiting in line for hours.

Protests followed, and last Monday the foreign minister, Titus Corlatean, was forced to resign. Yet starting early Sunday morning, long lines formed outside embassies and consulates across Europe. The number of people voting abroad doubled between the two rounds, and some were left waiting for hours and were still unable to vote.

“After nine hours and 10 minutes of waiting I gave up,” Ancuta Iordachescu, a photographer who tried to vote at the embassy in Paris, wrote in an email.

In reaction, thousands of Romanians took to the streets of Bucharest and other cities in protest, blaming Mr. Ponta for the delays and waving banners that read “Let them vote” and shouting “Ponta resign!”

“Ponta is breaking the rules — Romanians outside the country must be allowed to vote,” said Andrea Beltic, who stood outside the main government building.

Mr. Iohannis, 55, an ethnic German, ran what many considered a lackluster campaign. Yet voters seem to have decided that he was the better option.

“Ponta tried to present himself as a progressive leader, but he failed to convince people,” said Cristian Ghinea, director of the Romanian Center for European Policies, a research group.

Mr. Ponta tried to make an issue of his opponent’s religion — Mr. Iohannis is an Evangelical Lutheran in a country that is largely Orthodox — and that he and his wife had decided not to have children.

“Iohannis did a poor job in the two debates, but Ponta mobilized the people against himself,” Mr. Ghinea said. “He ran a dirty campaign which blew up in his face.”

In the first round, 52 percent of the 18 million eligible voters voted. It was estimated that around 62 percent voted this time, which according to Mr. Ghinea was the highest turnout in the last three presidential elections.

Romania’s president is responsible for foreign policy, defense and the naming of key prosecutors. Mr. Iohannis has vowed to make corruption a priority.

The current president, Traian Basescu, appointed Laura Codruta Kovesi to lead Romania’s National Anticorruption Directorate, and her office has successfully prosecuted many luminaries of Romania’s political class, including a former prime minister who had been considered Mr. Ponta’s mentor. Some had feared those efforts would be hindered if Mr. Ponta won.

Mr. Ponta’s party, the Social Democrats, has a working majority in Parliament, and he remains prime minister, so he and Mr. Iohannis will have to try to find a way to work together, probably until the next parliamentary elections in 2016.

“I see a difficult cohabitation between Ponta and Iohannis going forward,” Mr. Ghinea said.

Friday, November 14, 2014

Romania to elect new president after 'wretched' campaign

BY VALENTINA POP
http://euobserver.com/

BRUSSELS - Romanians head to the polling stations on Sunday (16 November) to choose between Socialist prime minister Victor Ponta and Klaus Iohannis, a Liberal mayor of German ethnicity, with questions raised about the fate of democracy in the country.

It is an uneven fight.

"You have huge Ponta billboards everywhere. And then, here and there, a small poster with Iohannis," a Nordic traveller who visited Bucharest last week told this website.

Ponta's official campaign kicked off mid-September, in a huge display of power, with 70,000 people bussed from all over Romania to a football stadium in Bucharest.


He promised a "great unification" of Romania, an end to the divisive politics of outgoing president Traian Basescu, as well as a political project of reuniting with Moldova in five years, "within the European Union."

Ponta's campaign slogan "proud to be Romanians" degenerated into slander against his contender's ethnic background: "Mr Iohannis is a thing, I am Romanian," said Ponta earlier this month.

On Tuesday, unidentified persons threw live and dead chickens at Iohannis' campaign headquarters, with the message "I am Iohannis" and "I am afraid of a [TV] debate", as Iohannis had not yet confirmed his participation to a TV clash with Ponta.

Iohannis did go to the TV debate in the end and said the chicken episode reminded him of death threats made by Nazis.

In Nazi Germany, if someone threw a decapitated chicken onto a person's property, it meant the security services were about to execute them.

"This is by far the most wretched campaign since 1990 and this symbol, probably you don't know, is a direct death threat. The last time someone used these symbols was in the 40s and they were used by the Nazis. I never thought we would reach this level in Romania," he said in a press conference.

Throughout the campaign, Iohannis sought to portray himself as a sensible, decent politician who managed to revamp his town, Sibiu and to attract German investors.

In a second TV debate with Ponta on Wednesday, Iohannis put the prime minister in the spotlight for: having backed corrupt party members; having plagiarised his PhD thesis; and for having hampered thousands of Romanians abroad from casting their vote in the first round of elections earlier this month.

After solidarity protests with Romanians abroad in Bucharest and other Romanian cities, the foreign minister, Titus Corlatean, resigned over the affair.

The new foreign minister, Theodor Melescanu, has said more polling stations abroad "could be opened in theory", but added that the current law does not allow it.

"The problems with the vote abroad have shown serious shortcomings with the rule of law in Romania. We have a weak state with fragile institutions," Laura Stefan from Expert Forum, a Bucharest-based think tank, told this website.

She said the stakes of these elections are particularly high because Russia's influence is growing in neighbouring Bulgaria and Hungary and because a weak administration would be more vulnerable to Moscow's influence.

"I am very worried if Ponta wins, that there will be a concentration of power in the hands of one party," Stefan said, noting that a recent law allows mayors and local officials to migrate to the Socialist party, meaning that in some parts of Romania "there is literally no opposition anymore."

Ponta's chances for a win are high, with recent polls putting him 9 to 10 percent ahead of Iohannis.

Barbu Mateescu, a Bucharest-based sociologist, told EUobserver the result might still be "tight" if there is a higher turnout than in the first round.

"A much higher turnout compared to first round will spell trouble for Ponta, because it is more likely for people who didn't vote at all in the first round to mobilise for Iohannis," he noted.

He added that for the party structure behind Ponta it is "inconceivable" to lose the vote.

"Thousands, maybe tens of thousands rely financially and personally on Ponta, if he goes down, they go down".

NYT: For Romanians, Presidential Election Hinges on Issue of Trust

BUCHAREST, Romania — On the surface, the presidential election on Sunday is a contest between two political veterans who agree on most of the important issues, from battling endemic corruption to continuing Romania’s fervent embrace of the European Union and the United States.

The real battle, political analysts believe, is over who can convince the voters that he can be trusted to follow through, rather than mimicking neighboring Hungary by weakening democratic institutions, hobbling independent watchdogs and centralizing power around a single party.

“I do not like to criticize one of my neighbors, but I can assure that I am a social democrat,” said Victor Ponta, the 42-year-old, left-leaning prime minister who won the largest number of votes in the first round of voting two weeks ago. “I am a pro-European and a pro-American prime minister, so Romania will be on this path in the future.”

His opponent, Klaus Johannis, the right-leaning mayor of the Transylvanian city of Sibiu, is just as vociferous.

“My orientation is West,” said Mr. Johannis, 55. “What is happening in Hungary now, that is not democracy going in the right direction.”

Certainly, no Romanian leader is likely to compare himself to Hungary’s political strongman, Viktor Orban. The two countries have a fractious relationship, driven by tensions over Romania’s sizable Hungarian ethnic minority. Neither is a Romanian politician likely, as Mr. Orban has done, to advocate closer ties with Russia, which remains hugely unpopular here.

But many political analysts — and Mr. Johannis— wonder whether Mr. Ponta, despite his disclaimers, might increase government control of formerly independent institutions, like the courts, built around an aggressive brand of nationalistic populism.

“I don’t trust him,” Mr. Johannis said flatly. “I just don’t trust him, especially when it comes to the administration of justice and the status of the law.”

Mr. Ponta says such mistrust is misplaced, and blames political opponents for trying to blemish his reputation with the European Union in Brussels, and in Washington.

“It is just a lie,” he said. “It is a campaign trick.”

Mr. Ponta led a field of 14 candidates in the first round of voting on Nov. 2 with 40 percent, drawing most of his support from rural areas in eastern and southern Romania, but also winning Bucharest, the capital. Mr. Johannis, whose support was largely in the more prosperous Transylvanian region in the west, was second with 30 percent.

For a decade, one of the central political battles in Romania has been over the establishment of independent prosecutors capable of uprooting corruption, said Sorin Ionita, chairman of the Expert Forum, a public policy research group in Bucharest. More than 1,000 public officials, including former Prime Minister Adrian Nastase, one of Mr. Ponta’s mentors, have been convicted of corruption in recent years.

Mr. Ponta vows to continue the anticorruption campaign, which he credits with helping Romania overcome its budget deficit by cracking down on tax cheats. But analysts worry that, despite his promises, he will slowly chip away at the system.

“They don’t need to do it right away,” Mr. Ionita said. The first order of business will be to reassure Brussels and Washington, he said, and hope that international pressure eases.

“Then, appointing chief prosecutors who are less independent, a few at a time, you can slowly erode the effectiveness of the institutions,” Mr. Ionita said.

Mr. Ponta’s political orientation is neither East nor West, said Adrian Moraru, deputy director at the Institute for Public Policy in Bucharest, and recent overtures the prime minister has made toward China may be calculated simply to keep his options open with Brussels.

“He is a pragmatist,” Mr. Moraru said. “If he ever has his back to the wall and needs to turn to China or Russia, I don’t think he will have a second thought.”

But while analysts worry that Mr. Ponta will lead Romania along a less transparent path, they stop short of comparing him to Mr. Orban.

“Orban is an ideologue,” said Cristian Ghinea, director of the Romanian Center for European Policies. “He is convinced that liberal democracy is hurting Hungary, and when he is criticized by Brussels, he is happy. Ponta is not like that. He is opportunistic. He grabs as much power as he can and, when he meets resistance, he stops.”

The crucial question for Romania, should Mr. Ponta win on Sunday, as widely expected, will be whether the West continues to put pressure on him to maintain the independence of the courts and continue to pursue corrupt officials, Mr. Ghinea said.

Otherwise, the temptation to copy Mr. Orban’s model may be too much to resist, analysts say.

“That has been a very good lesson for everyone in the region,” Mr. Ionita said. “This drift toward a weaker democracy. They see Mr. Orban as a pioneer who got away with it.”

The question worrying Europe and Washington is whether other incipient authoritarians will mimic Mr. Orban.

“We see a decrease in the quality of democracy in the entire region,” Mr. Ghinea said. “And I think Hungary and Romania are the main challenges to the core values of the European Union in this region.”

Ponta's confident climb towards Romania top job

Bucharest (AFP) - Romanian Prime Minister Victor Ponta, now tipped for the presidency, is an ambitious, confrontational politician who has risen rapidly in the post-communist era.

Polls give the 42-year-old boyish-looking prime minister 54 percent support going into the second-round runoff vote on Sunday against centre-right leader Klaus Iohannis.

These are the seventh elections in the poor, ex-communist country since the fall of dictator Nicolae Ceaucescu 25 years ago.

Social Democrat Ponta -- whose political role model is former British prime minister Tony Blair -- was so confident of his first-round victory on November 2 that he said he planned to watch the results on television "with a packet of popcorn".

Ponta made several stormy declarations during the campaign, including comparing the 10 years in power of conservative President Traian Basescu, his arch-rival, to the Nazi regime.

The president, who cannot run for a third term, responded by accusing Ponta of being a former spy.

- 'Targeted campaigns' -

Numerous criminal charges or corruption probes concerning his allies in the ex-communist Social Democrat Party have not affected Ponta's poll ratings.

Although he says he respects the independence of the justice system, his frequent criticism of the anti-corruption prosecutor (DNA), whom he considers to be biased, has raised doubts.

Ponta's coalition government passed new laws granting super-immunity to elected officials in December 2013 on a day dubbed "Black Tuesday" by his critics.

The former prosecutor entered politics in 2001, and quickly climbed the ranks of his party under the wing of Adrian Nastase, prime minister from 2000-2004 who was jailed eight years later for corruption.

Ponta was appointed premier for the first time in May 2012 by Basescu, after a centre-right cabinet was toppled by a no-confidence vote.

Just two months later he spearheaded an ultimately failed bid to impeach Basescu -- a move sharply criticised by the European Union and the United States.

Shortly after his appointment as prime minister, Ponta came under fire from academics who accused him of having plagiarised large parts of his 2003 doctoral thesis.

However Ponta's popularity has not suffered at home, helped by improvements in the economy and a drop in government debt.
Omnipresent on some TV channels, Ponta gained popularity with "targeted and constant campaigns", sometimes in the style of communist propaganda, said Corina Rebegea, from the Centre for European Policy Analysis in Washington.

But the strained relations with Basescu have delayed much-needed reforms, including of the health and education systems and the public administration, and the economy has once again fallen into recession.

A fan of rally driving and an admirer of legendary Argentine revolutionaryChe Guevara in his youth, Ponta draws support from his party's traditional electorate -- mainly rural people, small business employees and the elderly.

Wednesday, November 12, 2014

No More Rubber Boots as Romania Vote Splurge Tests Budget

By Andra Timu
November 12, 2014

For Luciana Bizgan, Romania’s presidential race could mean she’ll never again turn up for work wearing rubber boots.

Across the nation of 20 million, the second-most populous of the European Union’s newer members, Romanians are witnessing Prime Minister Victor Ponta’s bid for president triggering a spending glut on streets, schools and churches. Bizgan, 36, a seamstress, wants her dirt road in the southern town of Turnu Magurele asphalted so rain doesn’t dictate her footwear.

“I just hope this time it’s my street’s turn,” she said.

The EU’s second-poorest member, whose post-communist transformation has pushed bond yields to record lows, is loosening the purse strings a year after exiting monitoring by the bloc for fiscal slackness. Next year’s budget shortfall may balloon to double the government target, leaving a headache for Ponta’s successor, should the prime minister turn his poll lead into victory in a Nov. 16 runoff.

“The government will have to make some significant adjustments next year to meet the deficit-cutting plan,” Ionut Dumitru, head of the Romanian Fiscal Council, an independent advisory body set up at the behest of international lenders, said in an interview in Bucharest.

Romania’s fiscal gap swelled to as much as 7.2 percent of gross domestic product in 2009 as the government splashed out to boost pensions and raise public wages, even as the global economic chaos following Lehman Brothers Holdings Inc.’s demise curtailed tax revenue.

Ponta’s Quest

Spending was subsequently reined in to bring the deficit back with the EU’s 3 percent limit, sending yields on 10-year debt to 3.7 percent from 5.3 percent, data compiled by Bloomberg show. Romania is targeting a 1.4 percent shortfall in 2015.

While the budget was in surplus as of Oct. 31, Ponta has urged his ministers to accelerate expenditure through year-end. His cabinet has allocated more than 1.1 billion lei ($317 million) to local authorities, part of a budget review approved three days before the presidential campaign kicked off.

Since then, Ponta has traversed the country to reopen renovated schools and inspect spruced-up roads. The premier, who won 40.4 percent of the votes in the first round of the presidential race on Nov. 2, has also pledged additional cash, much of it from next year’s budget.

“Spend the money on the kindergarten and the sewage system quickly,” Ponta told the mayor of Darmanesti during a visit to the eastern Romanian town last month. He advised him he’ll “get more,” according to televised comments.
Sidewalk Overkill

Some cities are embracing that challenge. Pavements and curbs that were installed as recently as last year are again being replaced in Bucharest and other cities. Schools and mayors’ offices are being repainted.

Extra spending may help revive flagging economic growth. GDP expanded 1.2 percent from a year earlier in the second quarter, less than a third of the 3.9 percent clip recorded in the previous three months. That was the fastest in the EU.

The European Commission said in its autumn forecast, published Nov. 5, that without new measures to boost revenue or trim outgoings, the budget shortfall will widen to 2.8 percent of GDP in 2015.

The EU and the International Monetary Fund have delayed a review of Romania’s third standby loan since 2009 until after the election as they seek proof of fiscal sustainability. They’re awaiting the 2015 draft budget, which will probably be discussed next month and approved by parliament in January, Finance Minister Ioana Petrescu said Nov. 6.
Living Standards

The government will probably try to renegotiate fiscal targets with the lenders, according to Ponta, who says his nation must spend more to raise living standards and catch up with its peers to the west.
His presidential campaign featured pledges to raise wages and pensions, shun tax increases and lower a value-added tax on fruit and vegetables. Not all initiatives will be carried out, according to Societe Generale SA economist Roxana Hulea.

“Some of the measures and promises implemented for elections will have to be reversed,” she said by e-mail from London. “Especially because the IMF accord must be put back on track.”

Days before Ponta takes on Liberal Party Leader Klaus Johannis in the election decider, Bizgan, the seamstress, is ignoring campaign topics such as judicial independence. She’s most concerned about the winner’s fiscal generosity.

“I don’t really care who wins,” Bizgan said. “I just hope we’ll live a little bit better and my kids will be able to go to a decent school.”

To contact the reporter on this story: Andra Timu in Bucharest at atimu@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net Andrew Langley