Romania has been in crisis for the past few months – but not quite the same as the rest of Europe. They have been in thrall to the IMF for the past year – despite many of their indices (such as public debt) being much better than almost all other EU members.
The latest 20 billion IMF loan package led in May to government proposals to cut pensions causing, in turm, serious public protests and demonstrations. The Constitutional Court, however, ruled that this was unconstitutional – perhaps not surprising given the incredible pensions the judges and other members of the political class enjoy.In one case an ex-judge is known to have a monthly pension of 8,000 euros and generals (of which Romania has an extraordinary number) can expect about 5,000 euros a month. This in a country whose average monthly wage is 150 euros. And a 25% cut in public service wages has gone through – making life even harder for teachers and others. Not surprisingly, then, there was a government reshuffle last week which got no mention in the UK press (apart, presumanbly, from the FT) and it deserved little – except that a related blog from an excellent political analysts – Sorin Ionita – helped me understand the role which political parties here in Romania play in sustaining the corruption which everyone rails against. His site referred me to an articleeleven things which Vladescu won’t tell us (in Romanian only I’m afraid) which is an attack by an esteemed Romanian financial journalaist (Soviani) on the previous Minister of Finance for his dishonesty and hypocrisy in concealing eleven sources of income he had. As Minister, he was on the Board of several state companies – and apparently received 96,000 euros a year for attending their Board meetings which he forgot to declare. For an example of the financial asset declaration forms which have recently became compulsory you can see one filed by a State Secretary in the same Ministry - Bogdan Dragoi. The only problem is that although this 30 year-old official has been working in the Ministry for more than a year, his form (dated 10 June 2009) tells us that he is working in the municipality of Bucharest! However his brief CV (on the EIB website since he was appointed in Feb 2009 to its Board) tells us that he finished the municipal job exactly one year earlier than he completed and signed his declaration - in June 2008!
His declaration form also tells us that his net annual earnings were 50,000 rons (about 1250 euros - perhaps he made a mistake and this is actually monthly?) – although he also admits to owning 25,000 sq metres of land in Bucharest and another 25,000 sq metres of land in Calarasi). Of course he is now a State Secretary - actually earning 9,600 euros a month! He obviously hasn’t been using his Rolex, Breitweiler and other 2 watches (which he values in total at 14,000 euros) and does not therefore realise that it is now mid-September 2010. Rip van Winkle rather than Midas!
Just imagine yourself in such a situation - your boss has been sacked and is being publicly pilloried for having failed to declare external earnings. The first question of a normal person would be "Is my own declaration form in order?" But no, people like Dragoi enjoy such patronage (with no experience - he became a State Secretary at the age of 26 after an extended education!)and protection and seem so contemptuous of these forms that he doesn't even bother to update his form which understates his income by a factor of 40! 250 euros he says when it is actually 9,600!
His out-of-date form does, however, declare some of the additional revenues he earned as a committee member of various state funds.
I alighted on his declaration form by accident – just choosing his file at random from the list of officials’ forms. These assets, earnings and concealments reveal systemic immorality which, in Romania’s case, seems to be shaped and sustained by the role of its political parties which grabbed significant amounts of property in 1990 and which now determine the career path of young characters like Dragoi (nationally and internationally) and take in return a significant part of his earnings. For more on this issue see Tom Gallagher's recent article.
When people talk about pinning their hopes on the younger generation, I will always think of this face. It is when these scams are revealed that I feel some shame for having spent time working trying to reform such systems.