The PSD-ALDE Government’s decision to adopt an Emergency Ordinance to decriminalize certain criminal offenses, including the very important abuse of office, and to adopt a draft bill to pardon many categories of convicts, has led to a political and institutional crisis and to the largest street protests seen in democratic Romania.
     The Ordinance would close thousands of cases where the total prejudice is more than 1 billion EURO (according to National Anticorruption Department evaluation) and would not consider abuse of office the cases where the prejudice is under 200.000 LEI (about 45.000 EURO), among other provisions. That would see the cases of hundreds of important politicians closed by Justice.
Protests erupted all across Romania, with the largest held on 1st of February. About 150.000 people demonstrated in Bucharest and the total number reached 300.000 in Romania’s most important cities.
     The main governing party, PSD, announced that it will not back down and will not abrogate the ordinance.
     It held that position despite the fact that the pressure on it is huge: President Klaus Iohannis, the European Commission and the most important Western embassies in Romania, as well as labor unions, trade associations and many other entities asked it to withdraw the ordinance. Even PSD members either resigned from the party or asked the Government to withdraw this acts, the most powerful voice belonging to PSD vice-president and Iasi mayor Mihai Chirica.
     Business Environment minister Florin Jianu resigned as well from the Government.
     The ordinance should be enforced in 10 days since its adoption for its most important parts.

What could happen
     The protests will continue for sure in each day until the Government abrogates the ordinance and gives up on the pardon bill. The crowds will probably get bigger and the tension higher, with a high risk of instability, maybe even extended violence. There were already street fights at the last protest, but it seems that they were engineered by radical football fans.
     PSD’s attitude will be considered defying by the protesters.
     In the meantime, other state institutions got involved: The National Anticorruption Direction (DNA) started a case regarding the two normative acts and the General Prosecutor asked Supreme Council of Magistrates to withdraw the two prosecutors delegated at the Minister of Justice as state secretaries.
     This could lead to a real institutional war, especially as media information about the Government’s intention to dismantle DNA by merging it with anti-Mafia body DIICOT could deepen the rift.
     The Constitutional Court could stop all this as CSM (Supreme Magistrates’ Council) attacked the ordinance (something that the Romanian Ombudsman refused to do).

What is the impact on the business environment
     These tensions have an impact on the business environment and on the relation between the business environment and the authorities.
     First, tensions and uncertainty are certainly not helpful for doing business. The LEU, Romanian national currency, has started to weaken compared to foreign currencies, while some companies are reconsidering investments in Romania.
     Second, members of the Government and the Parliament are now under high pressure and less willing to engage with business on legislative or regulatory issues.
     A third possible consequence is the fact that the Government will take more generous measures to counter the loss of popularity, something that will increase the pressure on the budget that is already very stretched.
     Finally, the European Commission warned through the voice of its vice-President Frans Timmermans that this situation could lead to a “loss of access to European funds” for Romania.

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