Romanian opposition party wants oil and gas royalties paid to mandatory private pension funds

Romanian opposition party Save Romania Union (USR), one of the parties expected to replace the Social Democratic Party (PSD) after the general elections in 2020, came up with the idea of directing the oil and gas royalty revenues, generated by the exploitation of natural gas in the Black Sea, to the mandatory private pension funds (2nd Pillar).

Subsequently, at least 50% of this money should be invested in the energy sector and in the natural gas processing industry for producing high value added output.

The details were disclosed by the leader of the USR parliamentary group in the Chamber of Deputies, and former justice minister in the cabinet of technocrats headed by Dacian Ciolos, Cristina Pruna. The occasion for disclosing such strategy was a policy brief on the exploitation of the natural gas reserves in the Black Sea, meant to detail USR's strategy for this sector.

“We believe that these incomes can reach the accounts of all Romanians through the second pillar of the pension system, and from here, at least 50% of them could go to investment projects in energy infrastructure, projects to finance new capacities of electricity production, and other projects adapted to the realities in which we live, such as electromobility, investments in thermal insulation,” said Pruna, according to local Economica.net.

MP Claudiu Năsui, coordinator of the USR governing strategy, provided more insights into the policies envisaged by one of the parties expected by centre-right voters to promote economic reforms.

“Norway has that financial vehicle, the Sovereign Investment Fund, which works very well for them and which invests not only in Norway, but all over the world. They also have a different culture, a different administrative and institutional capacity. We, in Romania, on the other hand, we have the 2nd Pillar, a system that has been in operation for ten years, it makes very good returns and it does exactly that kind of thing: it saves money and it invests further, and we argue that this money expected to come from the Black Sea [offshore natural gas perimeters] - and possibly from other royalties - should be earmarked for investments and for the benefit of all Romanians,” he added.

USR’s intention to direct more money to the second pillar of the pension system, which is privately managed, is in contradiction with the current ruling coalition’s intention to diminish the role of the mandatory private pension funds.

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