Food price capping causes more tensions within Romanian ruling coalition

An expected decision on prolonging the price capping mechanism for staple food, which expires at the end of September, may generate more tensions within Romania's four-party coalition. The Social Democrats (PSD) expressed firm views over the weekend, after the government's spokesperson, Ioana Dogioiu, on September 13 claimed that the non-prolongation decision was approved by all the members of the coalition already.

"The decision not to extend the price capping mechanism was made by the governing coalition. The coalition decided, without any negative opinion at the time, that the last three-month extension of the cap was to be the last, because it caused economic distortions for both producers and traders," Dogioiu said, as reported by News.ro.

It was not clear whether "at the time" referred to "three months earlier" or on September 13, and this created confusion.

While possibly prompted by a misunderstanding, the debate reflects opposite views on this matter within the ruling coalition and another possible significant conflict.

"The price capping mechanism for staple food must be prolonged," wrote the secretary general of the government, Ștefan Radu Oprea (PSD), on Facebook on September 14, arguing that otherwise 1 million Romanians would come at risk of falling into poverty and social exclusion.

If the cap disappears, basic foods will become more expensive by 13%, thus inflation will increase by two or three per cent, warned the former minister of labour, Marius Budai (PSD).

The minister of economy, Radu Miruţă (USR), claimed that no decision on this matter has been taken, according to Economedia.ro. He linked the decision to the impact it may have on the budget execution. He assured that a decision will be taken, just like in the case of all other measures approved by the ruling coalition, only with the unanimity of votes from the four parties.

Asked whether there have been any recent discussions regarding the price capping mechanism for basic foods, Miruţă said that there were no such discussions in the coalition meetings he attended.