Theft of a nation

As I was writing yesterday’s post, I realised how little I knew about how the restitution of Romanian property (seized by the communists a half-century ago) had actually been attempted in recent years.
It seems I am not alone! The assessments seem to be subjective, confused and out-of-date. I was particularly disappointed by the 2008 study Property Restitution - What went wrong in Romania? by the Romanian Academic Society which promised to tell all but from which I emerged little the wiser - but at least knowing that the Romanian process was indeed distinctive (in central Europe) in its laggardly and utter confusing approach

A very short article in a recent issue of Journal of Property Rights in Transition updates a substantial and enlightening 2006 academic article on the subject entitled The Roof over Our Heads: Property Restitution in Romania; by Lavinia Stan - in The Journal of Communist Studies and Transition Politics, Vol.22, No.2, June 2006, pp.180–205 (which can be accessed and downloaded from www.academia.edu

Until 2005 successive Romanian governments blocked attempts by owners to recover their dwellings, siding with the tenants who were using the dwellings (well connected political, business, and cultural luminaries) against the owners (elderly persons or residents of foreign countries). Only 5 percent of all owners received their homes back. In 2005, a Property Fund (Fondul Proprietatea) started to compensate owners whose properties could not be returned because they had been demolished, bought by the tenants living in them, or (abusively) retained by the government offices (mayoralties and ministry departments) using them. The Property Fund relied on shares in large state-owned companies.

Because it was constituted over 15 years after the privatization process was launched, during which most such companies had been transferred into private hands, the Fund controlled few assets effectively. As such, many owners continued to receive neither property, nor compensation. Executive interference in the activity of the judiciary meant that many courts disregarded procedure and infringed both the Romanian Constitution and the European Convention of Human Rights when hearing restitution cases, thus prompting an increasing number of owners to approach the ECHR. This is why in 2010 the Court asked the government to revamp its property restitution scheme.

From October 2010 to April 2013 Romania did nothing to comply with the ECHR request. The vested interests of powerful political elite members in retaining ownership of the nationalized dwellings by disregarding the rights of the owners explain why the authorities did not consult with the owners, although consultations were recommended by the Court and would have involved little effort.

Political instability was also at play. There were no fewer than four cabinets during that time period (headed by Prime Ministers Emil Boc, Mihai Razvan Ungureanu, and Vasile Ponta), the first three of which were weak cabinets delegitimized by scandals, frequent replacements of ministers, and an unclear policy direction. Instead of solving the restitution cases, by providing the Property Fund with the means needed to compensate owners, punishing Fund leaders for mismanagement and waste, and protecting owners from undue pressure to renounce their property rights, these governments perpetuated an untenable system.

According to some reports, 1,000 intermediaries well connected to the Fund cashed in 1.5 billion Euros for property claims they brought from disillusioned initial owners, who simply gave up the fight. These intermediaries received compensation at higher rates and faster than thousands of owners whose claims the Fund refused to consider promptly and honestly.

All of this serves to prove just how right Tom Gallagher got it with the subtitle for his 2005 book Romania – theft of a nation. And his 2006 article for Open Democracy is perhaps as pithy a summary as you will get anywhere of this kleptomania and how it has been sustained.

And I see that this book by Lavinia Stan has just been published Transitional Justice in post-communist Romania – the politics of memory