Radu Magdin, Contributor
Consultant și analist de risc politic, CEO Smartlink, fost Policy Manager la Google Bruxelles
Can the Government and the private sector make up?
Who can win the war against the private sector or multinational companies? Well, not the Romanian Social-Democratic Party.
On May 26th, the Romanian voters have clearly rejected the actions and rhetoric of the ruling party directed against the independence of judiciary, the anti-corruption fight, European integration, and foreign capital. From its best result in recent history, the party went to its worst, scoring less than 22%. It is a lesson that, coupled with the conviction of its former leader, the party will have to internalise. PM Dancila has already shown signs that the old battles will be abandoned, but the question is what needs to be done for the relationship between the Executive and the private sector to normalise. Four aspects are important, in my opinion.
Bringing civility and respect back into the governmental discourse. The confrontational approach that has come to characterise the governmental action needs to end. Economic patriotism does not exclude a fair and civilized relationship with the business sector. The first gestures are important and they should signal a change of course. The contribution of the domestic and foreign business to economic growth should be publicly acknowledged, together with the idea that, for a left-wing government, fairness is a fundamental value: if there is need for fiscal readjustment, these policy changes should be based on solid analyses, not on guesses and prejudices. A rebalance towards professionalism is more than necessary. In general, the entire narrative of the Cabinet needs a revamp and the government should be clear about what are its priorities for next 18 months.
Transparency and predictability. On too many occasions, the Government announced economic and fiscal measures only to withdraw them the next day or week. Surprise announcements did not pass the test of reality and the perception of competence evaporated as fast as the initial plans. Transparency and predictability are not whims, their role is to make the decisional process better. After the loss of legitimacy confirmed by the elections, the Cabinet cannot afford to be the prisoners of the same style of governing. Any key measure has to go through the normal consultation mechanisms, which should be used at their full potential and not formally. A revamp of the Coalition for Romania’s Development is in order.
Consultation. It matters less what the Government truly thinks about the business sector, what is important is for the formal channels of communication to be reestablished and become fully functional. The institutionalisation of the dialogue, as was the case during Ponta’s term, is the next step, speaking of the Coalitia. Rather than communicating through vitriolic press releases, the two sides could use regular meetings to set the things straight and think how Romania could really take advantage of the window of economic opportunity before it closes under the pressure of local and international tensions.
The team of advisors. The PM needs to reshuffle the team of economic advisors (a good start was bringing Mr Borza) and give more weight to those who are less interested in playing political (or judicial) games. The resignation of Valcov is good news considering his public speech, but not much will be accomplished if another flamboyant economic advisor becomes the favourite media (negative) story. A few credible appointments in key economic positions, including boards in state owned entreprises, will cement the idea that the change is real and that the government is decided to give the real economy the deserved importance and respect.
After the May 26th vote, the political context has dramatically changed in Romania. The challenge is whether the change will translate into economic benefits for the country as a whole. The Government has to make a symbolic, but firm gesture towards reconciliation with the representatives of the business sector. And yes, the private sector should reinvest in this relationship, the parliamentary majority is likely to stay till end 2020.