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NOVEMBER - Election fever reaches boiling point

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By Cristian Cojanu
CEC Bank President and General Manager Radu Grațian Ghețea warned the business community last November that 2016's elections could spell bad news for the banking system. Speaking at Business Arena's 2015 Financial Leaders' Hall of Fame Awards gala, the seasoned banker told the participants that, as they hunt for votes, politicians could easily endanger the stability of the banking system. "With both local and general elections scheduled to take place in 2016, those who keep an eye on our Parliament's activity may have already noticed that new laws are passed and promises are made with the sole intention of pleasing the electorate. Some of those laws even have the potential to become extremely dangerous for the banking system. So, I would like to call on all bankers and professionals working in the banking sector to do their best and oppose the approval of populist measures," Ghețea said at the time.
"With both local and general elections scheduled to take place in 2016, those who keep an eye on our Parliament’s activity may have already noticed that new laws are passed and promises are made with the sole intention of pleasing the electorate. Some of those laws even have the potential to become extremely dangerous for the banking system. So, I would like to call on all bankers and professionals working in the banking sector to do their best and oppose the approval of populist measures," Ghețea said at the time.
And time has proved him right. Everyone remembers the heated debates on the bill that enables property buyers to walk away from mortgages. The bill was signed into a law in April, capping the loan value at 250,000 Euro. Even so, critics said the law, which applies retroactively, poses serious risks to the economy. But more was still to come.
Recently, the lawmakers have also approved a bill to convert Swiss franc loans into the local currency at historical rates, going against central bank recommendations. The move is expected to cost banks nearly 550 million Euro, according to the central bank.
In this context, the announcement that the Parliament has also passed a bill to scrap over 100 small taxes, at an annual cost to the budget estimated at 1.6 billion lei, took no one by surprise. The bill eliminates a number of small levies such as taxes for the commerce registry, fees for the issuance of temporary passports, and environment fees for car registration. It also scraps public television and radio license fees.
While some may welcome those legislative changes, it’s still a good thing there isn’t much time left before the general election, so Romania’s hard-earned economic stability has a chance to survive the populist onslaught.
In the meantime, Business Arena will continue to keep an eye on all the issues affecting the business community, reflecting its views, hopes and threats. For more on the most recent developments in business and economy, see this new edition of Business Arena, with the latest interviews and expert opinions.

To read the full version, see the print edition of Business Arena.

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