Romania's ruling party leader says Govt. may change disputed fiscal measures with new ordinance

Romania’s Government might adopt a new emergency ordinance to complement the emergency ordinance (OUG) 114/2018 after solutions acceptable to all parties in the banking, energy and telecom market are found, the president of the senior ruling party, the Social Democratic Party (PSD), Liviu Dragnea, announced.

"[But] we do not give up on the goals that have driven us to draft OUG 114," Dragnea stressed, according to local Mediafax.

He focused on the financial sectors. The banks should be more active in financing the economy, Dragnea said.

"We are interested in the banking system to invest more in the Romanian economy, to support economic development and they can do so, and together we have thought of a mechanism to stimulate this," said Liviu Dragnea.

Speaking of the mandatory private pension system (2nd Pillar) he provided a reason for the higher capitalization requirements set by OUG 114, namely: the fund managers will be allowed to invest in more risky projects; therefore higher capitalization would be needed to cover such higher risks. However, the logic provided by Dragnea goes against the conclusions of the negotiations with the fund managers’ representatives. Namely, that capitalization requirements would be reduced for managers willing to finance projects suggested by the Government.

"As far as 2nd Pillar is concerned, our intention has been and remains that privately managed public pension funds be allowed to invest in other projects. If they are allowed to invest in other projects, [they] will be forced to increase their capitalization to cover up the risk. We seem to be moving towards a solution," Dragnea said.

The talks with representatives of the telecom and energy industries will continue this week. The Government may adopt the new ordinance to complete OUG 114 after March 18, the PSD leader concluded.

(Photo source: Inquam Photos / Octav Ganea)