Radu Magdin, Contributor
Consultant și analist de risc politic, CEO Smartlink, fost Policy Manager la Google Bruxelles
What’s next for the private sector after PNL rules all?
The elections are over and the result could have not been clearer. The political cohabitation is definitely over and the responsibility for governing will not be shared anymore.
The PNL has it all and will be fully in charge of the country for at least the next year. Yet, power comes responsibility and, for the business environment, it is not entirely obvious what the change of government will bring about economically- and policy-wise. I will seek to sketch two aspects that the business sector should pay attention to in the future.
The collapse of the PSD government was expected, but the actual moment was not obvious. The consequences could be observed in the program that the Orban government put forward following the vote in the Parliament – it looked more like a continuation of the war with the PSD rather than a fully-fledged, different governing philosophy. Their plan was short on details on how to deal with the budget deficit or to accommodate the raise of wages and pensions adopted by the previous government.
The good news for the business sector is that much remains to be decided. The private sector has the chance to engage in a conversation where it really has the opportunity to shape the policies that the Orban Cabinet will enact in the various domains. There is room for smart ideas, there is openness for good plans and, after a couple of years of a centralized decision-making process, those in power seem to be genuinely interested in what the institutionalized civil society has to say. It all depends on how solid the policy briefs and the impact studies are, it all depends on the capacity to organize and deliver a compelling message on behalf on the business community. It a few words, organize, be smart and don’t panic!
Lead by president Iohannis, the new government will have a strong orientation for the European and foreign policy. Poor relations with Brussels in particular and Europe in general will have to be improved, and the sense of external isolation replaced with more cooperation. Romanians are still hoping for the access to the Schengen area, the end of the CVM or visa-free travel to the US: now the burden for that comes to PNL, no more PSD excuses. This euro-atlantic focus could be complemented by a more strategic emphasis on the profile of the Romanian economy, on how we want to evolve in an international environment that will become less permissive, as it will be shaped by a backlash against globalization and growing great power competition. Yes, day-to-day politics is important, but the broader picture should not be ignored: the migration of the Romanian labor forces has dramatically impacted the capacity to perform and to increase competitiveness. A debate of our economic plans and ambitions as a country is long overdue: PNL has a historic slogan “by ourselves” to live up to.
However, there are limits to what can be done. The electoral cycle is not over yet. Next year, we will have decisive local and parliamentary elections and the PNL will be under pressure not to roll back the wage-led growth policies promoted by the social-democrats. There is huge potential for the Liberals to be demonized for not complying with what has been already decided by the Parliament in terms of wages and pensions. So, expect no major changes until the legislative elections. The PNL, in a demonstration of political realism, will not rock the boat and will not come up with paradigm-shifting measures. Nonetheless, it can set the stage for more profound changes starting 2021. Here the narrative is almost as important as the policy: people may not like party contacts in the administration (“pile”), but austerity sounding cuts won’t be welcomed either. So, again, a full process of consultation should be envisioned first to shape the day-to-day polices of the government, second to influence the manifestos of the parties, and third to strategically impact on how Romania will be governed for the next electoral cycle. The PNL now officially rules it all, let’s see how they live up to the task.