Flaws and drawbacks

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Lately the central bank has hit the news, as some would say. We got used with an ‘aristocratic silence’ from the National Bank. It seems the agitated political scene, tempted too much to enter the economic and financial ‘pitch’ has stirred passions even in the institution-arbiter.
The Macro-Prudential Supervising Committee (CSMP) set up some ten days ago has already inflamed passions. In the spotlight, BNR Governor Mugur Isarescu, who would run this structure and allegedly ‘climb’ above the prime minister. PSD interim leader Liviu Dragnea was the one most upset, calling the move as ‘very serious’.
On Sunday evening BNR vice-governor Bogdan Oltean tried to sort things out, saying for digi24 TV that the committee will not be placed above the government, BNR or ASF, which are not forced to put in practice the committee’s rulings, but to assume their own decisions if they are not in accordance with CSMP’s.
I just notice that, all of a sudden, everyone is very interested in macro-economy and finances. It all began with the new Tax Code. The committee is the peak of the iceberg that heats up spirits already agitated by the Tax Code. It’s funny how much interest is BNR showing to this issue now, after months of silence. It seemed BNR was playing games in another country, not in Romania. Didn’t he governor know about the government’s intention to cut the VAT from 24 to 19%? That the same intention was included in the opposition’s (PNL) political programme? That, due to populist reasons, no party in parliament would dare not to vote in favour of the new Tax Code, with a sum of six important tax cuts? Did it have to wait until the draft law passed the parliament? Was Mr. Isarescu so sure he would convince President Klaus Iohannis to return the code to parliament for review? What if he didn’t?
This time, BNR woke up rather too late. Even if its reasons are right, together with the Fiscal Council’s (the council made its voice heard, by the way) it may be too late. The call for moderation, for VAT cuts in steps and so on, would they be taken into consideration by the MPs in a pre-electoral year?
BNR Governor, some ten days ago, was saying the Tax Code is inapplicable. It was one of the few occasions when Isarescu seemed to have panicked. He might have realised it was too late to change the odds. Then he tried to mend the fences, his spokesman saying the governor did not say the Tax Code is bad, it is good, but moderation is needed… Now Mr. Olteanu is trying to send the same message – moderation, steps are necessary, Romania’s credibility is at stake, a.s.o.
Well, PM Victor Ponta, his cabinet, the ruling coalition and at least some of the Liberals are quite determined to vote again in favour of the Tax Code. BNR’s explanations have surfaced late, maybe too late. In its ‘glass tower’ the Governor maybe thought everyone is interested in his advice. The new Supervising Committee might have enhanced this view. But Mr. Mugur Isarescu – if consequences of a wrong decision are so dramatic as he says they will be – considered the Tax Code so important (along with its implications) he should have left his ‘aristocratic silence’ and explain to the common people what is it all about.
People tend to forget Mr. Isarescu was at the BNR’s helm during the ‘90s, a decade when inflation rate peaked to over 200 percent, when foreign currency was confiscated by the state (on the brink of collapse) during PM Theodor Slotojan. Some don’t. Those were also times of silence for BNR.

Victor Lupu

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