Nations in Transit
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Democracy Score(1 = best, 7 = worst)
National Democratic Governance(1 = best, 7 = worst)
Electoral Process(1 = best, 7 = worst)
Civil Society(1 = best, 7 = worst)
Independent Media(1 = best, 7 = worst)
Local Democratic Governance(1 = best, 7 = worst)
Judicial Framework and Independence(1 = best, 7 = worst)
Corruption(1 = best, 7 = worst)
Population: 21.4 million
GNI/capita, PPP: US$14,290
Source: The data above were provided by The World Bank, World Development Indicators 2012.
*Starting with the 2005 edition, Freedom House introduced separate analysis and ratings for national democratic governance and local democratic governance, to provide readers with more detailed and nuanced analysis of these two important subjects.
NOTE: The ratings reflect the consensus of Freedom House, its academic advisers, and the author(s) of this report. The opinions expressed in this report are those of the author(s). The ratings are based on a scale of 1 to 7, with 1 representing the highest level of democratic progress and 7 the lowest. The Democracy Score is an average of ratings for the categories tracked in a given year.
The year 2011 was marked by the fading hope that the global economic crisis would draw to a close and the march toward prosperity would resume. The center-right ruling coalition, which paid a heavy cost in terms of popularity for its implementation of a severe fiscal austerity package in 2010 and 2011, was unable to restore salaries and pensions to precrisis levels despite the approach of the 2012 parliamentary elections. This strained relations between the president and prime minister on the one hand, who advocated “doing the right thing” economically and bearing the political consequences, and their coalition partners on the other, including powerful members of the ruling Democratic Liberal Party (PDL) who would have liked to relax the austerity policies before elections. The opposition seized the opportunity presented by the unpopular fiscal restraints and demanded the resignation of the government and the president.
While the government succeeded in restoring Romania’s macroeconomic balance, regaining financial markets’ confidence, and implementing important reforms (on labor, education, social assistance, and the judiciary), critics said it acted without sufficient public consultation. Moreover, by the end of the year the government was exploring unorthodox means to reduce its expected electoral losses in 2012, including postponing local elections until late in 2012 and redrawing electoral districts. By-elections held in 2011 for a few vacant seats in parliament appeared to confirm the role of local officials as electoral agents for their respective national parties, with mayors and county councils growing increasingly dependent on financial transfers from the central government due to the squeeze in public budgets.
Civil society and the media were also confronted with economic difficulties, as the traditional international donors have reduced their support and sources of media revenue have dwindled. While freedom of expression did not face major threats as such, the economic crisis left some media outlets more vulnerable to improper influences. Finally, the fight against corruption was stepped up in 2011, with new investigations launched against high-profile figures in the ruling party, the opposition, and the upper levels of the judiciary.
National Democratic Governance. Due to pressure from its international partners to contain the effects of the economic crisis, the main priorities for the Romanian government in 2011, as in the previous year, were debt reduction and budget discipline. Policy targets were mostly achieved, and the government received praise for its economic management, even though its decision making often excluded input from civil society groups and the opposition. A new International Monetary Fund (IMF) agreement forced some governance improvements in critical areas, such as the management of state-owned companies and the elimination of a system of discretionary incentives for staff working in public institutions. However, these changes were met with strong opposition, both within the government and in parliament, casting doubt on the legitimacy and sustainability of reforms. The national democratic governance rating remains unchanged at 3.75.
Electoral process. Political parties spent most of the year engaging in preparations and tactical maneuvering related to the 2012 local and parliamentary elections. Various proposals to alter the voting system and the size of parliament were debated, but no substantial changes to electoral laws had been enacted by year’s end. In December, the ruling coalition advanced plans, without public consultation, to postpone the June 2012 local elections so that they would be held concurrently with the November parliamentary vote. The move drew objections from civil society as well as the political opposition, which appealed to the Constitutional Court and even threatened to withdraw from parliament over the issue. Due to the government’s attempts to alter electoral rules to achieve a political advantage, Romania’s electoral process rating worsens from 2.75 to 3.00.
Civil Society. Civil society enjoyed a considerable degree of public trust in 2011, despite adverse economic circumstances, but continued to face difficulties in mobilizing civic participation and local resources. Changes in the legal framework on labor relations negatively affected trade unions, which were also confronted by corruption and integrity questions involving some of the movement’s leaders. Other legislative changes that were enacted or under discussion during the year appeared likely to open new opportunities for organizations working in education and social services. The civil society rating remains unchanged at 2.50.
Independent Media. The continued erosion of the economic base of Romanian mass media in 2011, due to the direct and indirect effects of the global crisis, left newsrooms and journalists increasingly exposed to political and economic influences. As specialized investors left the market and the number of jobs in the sector declined, there were serious concerns regarding the ability of the media to ensure fair coverage of the 2012 elections. Some outlets that would otherwise go bankrupt were being temporarily sustained by their owners for the sole purpose of affecting the election campaign. Nevertheless, no direct political pressure or censorship by the legislative and executive branches materialized in 2011. The independent media rating remains unchanged at 4.00.
Local Democratic Governance. The global crisis and its more recent effects on the European region weakened the economic foundations of local governments in Romania. Combined with a traditionally clientelistic political culture and fragile institutions, this increased the risk that partisan forces at the national level could use local governments as political instruments in connection with the 2012 balloting. Bold plans to change the structure of local administrative units were circulated during 2011, but they did not appear likely to be implemented before the next round of elections. Romania’s local democratic governance rating remains unchanged at 2.75.
Judicial Framework and Independence. The main issues on the judicial reform agenda in 2011 were the enforcement of a new civil code, the inauguration of newly appointed members of the Superior Council of Magistrates, and disputes over a new system of promoting judges to the High Court of Cassation and Justice. The quality of the rule of law remains flawed in Romania, but due to the progress achieved during the year, the judicial framework and independence rating improves from 4.00 to 3.75.
Corruption. The first months of the year featured a series of high-profile investigations into corruption among border police and customs officials as the Romanian government attempted to win entry to the European Union’s passport-free travel zone. Two final convictions on corruption charges were issued against members of parliament in 2011, and two similar convictions were awaiting appeal. Investigations into trafficking in influence were launched in the spring against a Romanian member of the European Parliament and a High Court judge, and in the fall, key political figures from the ruling party were arrested on allegations of bribery. Despite these and other signs of improved enforcement, the overall level of graft apparently remained fairly high. Some corruption cases against politicians and officials began to move more quickly through the courts and administrative bodies, but lengthy delays and statutes of limitations continued to jeopardize their outcomes. In June, the Constitutional Court invalidated two proposed amendments designed to eliminate obstacles to investigating illicit enrichment. Final convictions in major cases were still relatively rare. As a result, Romania’s corruption rating remains unchanged at 4.00.
Outlook for 2012. The government is likely to continue implementing fiscal austerity policies through 2012, despite their unpopularity, and follow up on its agreements with the IMF and the European Commission by reforming stateowned companies, a major source of inefficiency and patronage at the expense of the public budget. However, other structural reforms under discussion, such as those concerning health care, territorial reorganization, and reducing the size of parliament, will probably be postponed. The elections will be held on schedule, with local elections in June and parliamentary balloting in November, alleviating the fears of democratic backsliding. The center-left opposition is positioned to win both contests by a comfortable margin. However, the integrity of the electoral process will remain in question due to the usual allegations of vote-peddling by the local party machines. The judiciary will have to confirm its independence through timely and credible decisions in corruption cases against high officials. The rule of law as a whole will continue to be monitored by the European Union, as in Bulgaria, through the Mechanism of Cooperation and Verification (MCV).
Despite serious economic pressures and frequent talk of government reshuffling or even early elections, the ruling coalition remained in power throughout 2011 and continued to implement the austerity and governance reforms sought by the International Monetary Fund (IMF) and the European Union (EU). However, the momentum of these often unpopular reforms suffered somewhat as the 2012 elections approached.
The reform of Romania’s state-owned enterprises (SOEs) was considered the most critical element in efforts to improve public-sector governance, as the companies have been a major source of corruption in public procurement and a means to divert public resources by evading budgetary processes and controls. The SOEs distort the economy through preferential contracts with favored suppliers or clients, and many are effectively bankrupt or have huge arrears. They also pervert the democratic politics of the country, serving as one of the main avenues for party-related clientelism.
The new IMF agreement concluded in March 2011 placed a special emphasis on publicly owned enterprises, calling for a reform of their corporate governance structure that would hold managers accountable for their performance and at the same time shield them from political interference. The relevant legislation (Emergency Ordinance 109) was approved at the end of 2011 and roughly meets the prerequisites of a good corporate governance code, though its effectiveness will be tested when it is implemented in 2012. Other initiatives in parliament threatened to undermine the corporate governance reform. For example, a bill designed to regulate the salaries of managers and establish criteria for the selection of management was not in accordance with government-issued legislation, even though one of the lawmakers behind it was the economics minister.
The other substantial governance reform of 2011 eliminated performance bonuses in several public institutions. In reality, as several past scandals have shown, most of these bonuses were not related to the actual performance of the staff, since performance targets were never clearly defined. Instead, they served as a vehicle for extrabudgetary funds, evading the scrutiny of the normal budgetary process and giving full discretion to the institutions’ leadership. The practice allowed the administrators of some public institutions to distribute higher pay in a rather feudalistic manner, with employees personally indebted to their superiors for their raises. After two years of pressure from the IMF and the EU, the government finally eliminated all such discretionary bonuses, though there is no guarantee that they will not be reintroduced once the IMF agreement expires and the external pressure lapses.
Setting aside the role of international institutions, Romania’s own system of governmental checks and balances remains rather dysfunctional. While the ruling coalition enjoys a narrow majority in both chambers of parliament, it almost always faces difficulties in passing critical legislation, either because members of parliament (MPs) are frequently absent for important votes or because individual MPs rebel and vote against government initiatives. Even a cabinet minister may support one position in government and vote the opposite way as an MP. The government is routinely tempted to employ fast-track procedures to bypass parliamentary obstacles, but this undermines the legislature’s authority and leaves little room for debate. Too often, important decisions are made by means of emergency ordinances, or by assuming “government responsibility,” a procedure whereby the government advances a bill under emergency rules and its rejection amounts to a vote of no confidence. This mechanism was employed for many pieces of legislation in 2011, including the new Labor Code. It was also used to ensure the passage of EU-required legislation on the rule of law, including new rules for the promotion of the judges to the High Court of Cassation and Justice.
Despite its frequent circumvention of normal parliamentary procedures and standard democratic practices, the government took some encouraging steps for the improvement of social dialogue and the involvement of stakeholders in policy decisions. For example, it passed a package of legislation to change the structure of the Economic and Social Council (CES)—a consultative body composed of government, business, and trade union representatives—to include a broader range of unions, employer associations, and civil society groups in debates on bills affecting issues like taxation, labor, and the business environment. The success of this reform will not be clear until it is implemented in 2012.
By-elections were held in a handful of counties and municipalities in 2011, with the main local and parliamentary ballots scheduled for 2012. The parties developed their preelectoral coalition strategies, and several major amendments to the electoral framework were debated during the year. The latter were in keeping with Romania’s traditionally volatile electoral system; no two consecutive elections since 1990 have been conducted under the same set of rules. But despite media predictions of major changes in the political environment, conditions proved relatively stable, and no significant overhaul of the electoral system seemed likely at year’s end.
The electoral reforms under discussion in 2011 included a new parliamentary voting system, a reduction in the size of parliament, holding concurrent local and parliamentary elections in 2012, and the introduction of an absentee voting system. However, the only initiative to win passage was the changed electoral calendar. The ruling center-right coalition, in agreement with President Traian Băsescu, decided at the beginning of December to postpone the local balloting from June until November, so that it would take place on the same day as the parliamentary vote. The ostensible purpose of the change was to save around €20 million (US$28 million) in administrative costs, but critics argued that the national leadership wanted to keep allied incumbents in local offices long enough to act as electoral agents for their side in the campaign. Many technical details were left unresolved. For example, the existing differences between national and local electoral systems and constituencies would make a simultaneous vote difficult. Moreover, the legal basis for extending the mandates of the current mayors and councils by six months, which the constitution allows only in truly exceptional cases such as crises or wars, was questionable. The center-left opposition—the Social Democratic Party (PSD) and the National Liberal Party (PNL)—opposed the merging of the elections, not as a matter of principle, but because they thought it would negatively affect their chances. They appealed to the Constitutional Court, and a judgment was expected in early 2012.
Meanwhile, it remained undecided whether the overall number of MPs would be reduced, and if so, by how much. A census in 2011 showed that the stable population of the country had declined by almost 10 percent over the last decade, so a natural solution would be to similarly reduce the size of parliament. However, in a referendum called by President Băsescu in 2009, a large majority of the population voted in favor of reducing the number of MPs to just 300, from over 450, and abolishing the upper house, the Senate. Such changes would require a constitutional amendment. There is little agreement on how the problem should be tackled, and lawmakers have a strong interest in maintaining the status quo, as many would lose their positions and the accompanying benefits in any reduction.
The debate over the parliamentary voting system was also unresolved at year’s end. Under the current compensated uninominal system, a single vote is cast for the candidate and the party. Candidates who win more than 50 percent in their single-member constituencies are elected, and the remaining seats are distributed to the parties according to their national share of the votes for unelected candidates. This led to unexpected results in the 2008 elections, which were contested both by the electorate and by politicians. The main complaint was that the system allowed candidates who ranked third or fourth in their own constituencies to win seats, thanks to party-based redistribution. While all parties appear to agree that improvements are needed, no single proposal is supported by a majority.
In August 2011, Băsescu proposed the introduction of a simple uninominal ballot—a “first past the post” system in which the leading candidate in a constituency wins the seat, either in one round, regardless of the margin, or in up to two rounds, with 50 percent required to win. The largest opposition party, the PSD, publicly supported the two-round version of the uninominal ballot. But its ally, the PNL, has benefitted the most from the current system, as only 49 of its current 93 MPs were ranked first in their respective constituencies; the other 44 won based on the overall party results, sometimes with less than 10 percent of the votes in their districts. The Hungarian Democratic Union of Romania (UDMR), a party in the ruling coalition that represents the ethnic Hungarian minority, strongly opposed the elimination of the party-based redistribution, as the ordinary uninominal system, which favors large parties, could sharply reduce or eliminate its presence in Parliament.
Parties’ preparations to form coalitions for the 2012 elections were another key development in 2011. In February, the PSD, the PNL, and the smaller Conservative Party (PC) formalized a bloc called the Social Liberal Union (USL) and decided to run together on common lists in both the local and parliamentary elections. However, it was unclear whether the parties would agree on all candidates. Some friction was already apparent, particularly concerning the local elections, where individual clout is more important than party affiliation. There was also speculation about whether the parties’ core voters would tolerate the coalition, given their ostensible ideological differences and past rivalries.
The Ministry of Foreign Affairs launched a draft proposal on absentee voting in early 2011. Under the current system, the sizable Romanian diaspora, concentrated mainly in Italy and Spain, must travel long distances to the nearest Romanian consulate to cast a ballot. As a result the turnout among citizens living abroad has always been very low. The opposition vigorously objected to the proposed change, claiming it lacked sufficient antifraud measures. This stance was also connected to the fact that the diaspora has voted predominantly center-right, and in 2009 accounted for the thin margin of victory in Băsescu’s reelection as president.
Growing public frustration with incumbent politicians, combined with the broader international mood of protest exemplified by the “Occupy” movement, led to the formation of various groups that advocated direct democracy and won extensive media coverage. In early 2011, several bloggers and public figures speculated about the opportunity to establish a new party with an anticorruption agenda and different internal promotion rules, as an alternative to both the Social Liberal Union and the ruling coalition. The proposed party did not materialize at the time, but the idea resurfaced in September, when the “New Republic” political movement was set up by a handful of younger people who were dissatisfied with the PDL. The movement had not yet become a formal political party by the end of 2011, but it aimed to attract urban residents who rejected the existing parties and would otherwise not vote. This and similar initiatives on the left and the right will face serious practical difficulties in organizing and running in elections, because the administrative thresholds are quite high: 25,000 founding members from at least 18 of Romania’s 41 counties are needed to register a political party.
The number of registered nongovernmental organizations (NGOs) increased by 15 percent in 2011, continuing a trend from the previous years. By and large, the perpetuation of the economic and fiscal crisis undermined citizens’ trust in public institutions such as the presidency, parliament, political parties, and the church, but trust in civil society remained relatively steady, though still lower than was the case in Western Europe. Citizens can direct 2 percent of their taxes to an NGO or church of their choice, and about 1.6 million taxpayers used this mechanism in 2011, slightly more than in the previous year.
At the beginning of 2011, the Romanian government changed two important laws regarding industrial relations, the Labor Code and the Law on Social Dialogue. The latter regulates the organization of trade unions and employers’ associations; the consultation mechanisms involving the government, labor, and employers; and the collective-bargaining process. The amendment to the Law on Social Dialogue eliminated national collective agreements. The main argument behind this decision was the lack of legitimacy of collective-bargaining partners; the media had raised major concerns regarding the representation of employers’ associations in particular. By law, the collective-bargaining partners needed to meet certain thresholds of membership and geographical range to secure representation, which were assessed by a court upon registration. However, the government had no subsequent mechanism to review the associations’ representation criteria and thereby ensure the legitimacy of decisions that affected all employers and employees in the country. The existing collective agreements remained in place after the amendment, but only for those companies that were part of the agreement, not for the entire sector.
The legal changes had the overall effect of reducing the role of national federations in collective bargaining, denying trade unions an important instrument for negotiation. For this reason, the amendments triggered massive street protests by trade union members. Tens of thousands of workers took to the streets in the first months of the year. However, despite such opposition, both new laws were enacted through a fast-track procedure, with the government surviving two parliamentary motions of no confidence.
At the same time, criminal investigations damaged the credibility of the trade union movement, with several key leaders accused of corruption and mismanagement of unions’ assets. Marius Petcu, the leader of one of the largest trade union federations, was caught receiving a €40,000 (US$56,000) bribe from a contractor. The National Integrity Agency (ANI) found that Petcu could not explain the origins of €700,000 (US$980,000) in personal assets. The vice president of the same federation, Liviu Luca, similarly faced criminal charges for mismanagement of unions’ assets and money laundering, allegedly in cooperation with Sorin Ovidiu Vantu, a media mogul who was also under investigation and house arrest. Despite these pressures, Luca was recently appointed as one of Romania’s representatives to the European Economic and Social Committee (EESC), a key consultative body of the EU that brings together trade unions, employers’ associations, and civil society.
In another reform during the year, as noted above, the structure of the Romanian CES was adjusted to bring it in line with the European model. NGOs are to replace government representatives on the council, a consultative body that also includes trade unions and employers’ associations. However, the functionality of the CES needs significant improvement if it is to become a truly valuable partner in decision making. Its capacity and expertise remain insufficient to provide quality feedback to the government, and the new civil society representatives had still not been nominated at year’s end.
NGOs continue to focus on service provision, with less attention given to advocacy for better policies for their constituencies. This is due in part to the lack of available funding. Since Romania joined the EU in 2007, more money has been allocated to organizations providing social services and much less to watchdog groups. The former took full advantage of the opportunities opened by European structural funds, especially under the European Social Fund, but even here the collection of European-funded projects proved difficult and bureaucratic. The rules and requirements have changed frequently and unpredictably, putting a heavy administrative burden on recipients. A group of 18 of the most preeminent nonprofit organizations established an informal Coalition for Structural Funds in 2006 and asked for cuts in the red tape surrounding European programs. The coalition has closely monitored procedural changes and created an early-warning system for grantees to identify irregularities and excessive requirements from the public bodies in charge of managing structural funds.
The government and parliament are currently considering a draft law on social service provision, which allows local authorities to competitively contract out social services either to NGOs or to public providers, and a draft law on social economy, which aims to encourage civil society to establish “social enterprises” that both raise funds and serve a group’s mission. NGOs are monitoring and participating in the legislative process through the Civil Society Development Foundation, a Romanian grant-giving organization and resource center for the civil sector.
Environmental organizations are among the few that have managed to mobilize the public in large volunteer efforts. For example, in 2011, the Let’s Do It Romania campaign gathered 250,000 volunteers to clean up the environment in a one-day annual event. However, for more complex matters of civic concern, including multifaceted ecological issues, the general public has shown very low levels of interest in NGO-led activism.
Education is one area where civil society seems more developed, as 7.5 percent of declared NGOs work in education. These groups hire almost 20 percent of all people employed by civil society organizations, and their revenues represent 22 percent of the total for the NGO sector. In 2010, educational organizations were mainly concentrated in the area of higher education, and included private universities. But the year 2011 featured an expansion of other organizations focused on extracurricular activities, optional courses, community projects, entrepreneurial education, or leadership training. This trend is likely to continue, as the new Education Law, enacted in January 2011, bolsters the role of parents’ and students’ associations in the supervision of school management and grants them representation on school boards. The students’ associations had already been vibrant and active for several years, and the new law could provide an opportunity for parents’ associations to become similarly active. However, as very few schools have organized parents’ associations, it could lead to the creation of nonfunctioning groups designed to meet the legal requirement.
In early 2011, the German media group WAZ, one of the few specialized foreign investors still active in the Romanian media sector, announced that it would leave the domestic market, where it had held a national flagship newspaper and a number of smaller publications for well over a decade. WAZ president Bodo Hombach stated that the withdrawal was driven in part by the economic distortions caused by powerful business magnates in the sector. These owners pump large subsidies into unprofitable media outlets to serve their political and other business interests, undercutting normal, self-sustaining media operations. The Swiss media group Ringier had similarly sold assets in Romania the previous year, and the WAZ departure only added to growing fears about the independence and diversity of journalism in the country.
Romania is a large potential media market, but it has long suffered from low readership and internet penetration rates when compared with neighboring countries. Newspapers and other traditional media outlets have also been hobbled by the migration of more affluent news consumers to the internet and the collapse of advertising revenue associated with the ongoing economic crisis. Many print and electronic media had to cut back on staff in 2011. Print media have also reduced press runs, the number of pages per issue, and the frequency of publication. A record number of print outlets have moved online in the past year, even in niches such as economic and financial journalism. In fact, “moving online” has become a euphemism for downsizing, with only a handful of writers retained to ensure the perpetuation of the brand. Online media saw a slight increase in market share at the expense of television and radio in 2011, but all these shares are fractions of a steadily shrinking pie. Overall revenues for online media in 2011 were on track to amount to 20 to 25 percent of the level during the peak, pre-crisis years. Journalists’ salaries have been cut, after years of increases, and the flow of news anchors and reporters from private to public television channels has continued, as public outlets seem to offer more stable jobs and pay. But these same outlets have been criticized for their alleged progovernment bias, stemming from the fact that their boards of directors remain politically appointed. The depoliticization of the state-owned television and radio broadcasters did not materialize during 2011, and proposals issued the year before were shelved.
The cumulative effect of these trends is that the whole media landscape is weaker than ever and more likely to be affected not only by the business cycle, but increasingly by the electoral cycle. It is quite common for mass media owners to be more interested in exerting political influence than building a profitable media operation. Depending on the result of the 2012 elections, many of the remaining outlets may be shut down by their owners once their political missions are fulfilled. The fact that there were no significant mergers or consolidations in the sector in 2011, despite the dire economic situation, indicates that considerations other than the search for audiences and profits continue to prevail.
The declining value of media assets has created opportunities for investors with no previous interest in or knowledge of the sector. The most obvious example is the breakup of Realitatea TV, one of Romania’s two most influential private television news channels, in the fall of 2011. The investigation of its owner, Sorin Ovidiu Vantu, for alleged financial fraud and money laundering left the unprofitable business without financial backing, and it was sold in April. Then, amid confusion and mutual recriminations, the staff, equipment, and broadcasting rights were split between the two new owners, one from the information technology industry and the other from real estate. Insiders detect the usual political maneuvers behind these developments, namely two rival wings of the PSD struggling for control over the media group, which will be useful in the upcoming electoral campaigns.
This was probably the most spectacular, but far from the only example of obscure local businesspeople serving as fronts for political interests, on both sides of the political spectrum. Journalists’ professional associations and trade unions, weak even before the crisis, were not able to counterbalance the year’s negative trends or to effectively represent the interests of their members.
The rise of social media has been a source of hope for independent voices in this bleak landscape. Websites such as Hi5.com, Facebook, and Trilulilu.ro together attracted almost three million Romanian users. Other popular sites are the forums portal Softpedia.com, a rare example of an international platform owned by a Romanian company, and the self-explanatory eJobs.ro. There has been an explosion of personal blogs, including many with political commentary. But there is little evidence that these new forms of media can effectively replace traditional outlets. The most visited sites are utilitarian in nature, and the most popular blogs belong not to upstart journalists or commentators, but to celebrities from the world of entertainment. Some political actors, especially new entrants, plan to use social media for social or political mobilization in the 2012 electoral year, but their potential has yet to be proven in Romania.
The more mainstream Romanian news websites, such as Hotnews.ro, have a smaller audience than the portals mentioned above and rely partly on EU projects to bolster their revenue stream. The best known and most active media-monitoring NGOs—the Center for Independent Journalism, a training organization, and ActiveWatch—also rely on grants from the EU or other foreign donors. The very survival of such organizations in the adverse circumstances of the last few years qualifies as a major success. In addition, state authorities did not take any measure or action that could be interpreted as censorship or an attack on freedom of expression in 2011. As expected, a number of restrictive bills drafted by individual lawmakers in 2010 were dropped.
As in most of the rest of Europe, especially in its south and east, local governments in Romania were in crisis in 2011. The local budgets shrank even more than the central budget, indicating that the central government applied pressure to the local and intermediary tiers so as to create fiscal space at the center. Facing demands from financial markets and international partners including the EU and the IMF, the central government was tempted to pass financial burdens to the local level, either by cutting transfers and local borrowing or by forcing local governments to run operational surpluses. There are strong signs that this was a deliberate strategy in Romania.
The government introduced stringent limitations on spending and transfers that in some instances amounted to micromanagement from the center. These included caps on material and investment costs, salary cuts, and draconian hiring restrictions. While the necessity of strengthening budget discipline at the local level was undeniable, the manner in which these changes were implemented was not exactly in line with the European Charter of Local Self-Government, and reflected a lingering centrist political culture in Romania. There was little technical preparation and almost no consultation with the local government associations. Sometimes the decisions came overnight and had retroactive effects, which increased the uncertainty of the budgeting process.
The political effects of this local economic weakening are a serious concern. Two-thirds of the 2,860 rural communes are currently unable to cover their own salary expenses, leaving them very susceptible to political pressure from the center ahead of the 2012 local and national elections. One example of a financial transfer that is regularly used to keep local authorities in line is the Emergency Fund. The sums not spent from this fund, which is deliberately increased at the programming stage to ensure a substantial surplus, are distributed at the end of the fiscal year, mainly to municipalities and counties, with no clear criteria for allocation. In spite of repeated criticism and evidence provided by watchdog organizations that the distribution is discretionary and politicized, no corrections were made in 2011, and the practice continued unabated. A generous sum was earmarked for the Emergency Fund in the budget for 2012.
The by-elections held in 2011 demonstrated how the local authorities will be expected to “deliver results” for their respective national parties 2012. In the most important and visible contests, including one at the very end of 2010, the candidates were relatively unknown or tainted by allegations of wrongdoing. Nevertheless, the dominant county-level political machines ensured victory for their candidates more often than not. All parties claimed irregularities, such as carousel voting and other forms of electoral fraud, but the complaints were not thoroughly investigated and did not yield any change in the results.
It was not completely clear in 2011 whether the 2012 local elections would be held using the current structure of local governance. Under strong pressure from President Băsescu, the PDL floated various proposals to (i) create large regions with their own elected councils, at an intermediate level between the national and county governments; (ii) change the structure, and perhaps the administrative limits, of the city of Bucharest by centralizing the city budget and splitting the current six districts into smaller units; and (iii) reduce the number of financially unsustainable rural communes by merging them into larger units.
The last proposal would be probably the most beneficial for Romania, from the point of view of both administrative efficiency and political accountability. However, the merging of communes would face opposition among local elites and substantial segments of the population. On the other two proposals, many details were left unaddressed by their sponsors. Moreover, the changes would entail amendments to the constitution, making it unlikely that they could be implemented before the next round of elections.
Over the past several years, Romania has embarked on an ambitious project to reform the cornerstones of its legal system: the Civil Code, the Civil Procedure Code, the Criminal Code, and the Criminal Procedure Code. The new codes were drafted with the help of international experts, and parliament has discussed and adopted them. While the latter three were not set to enter into force until 2012 or 2013, the Civil Code took effect in October 2011. During the year, the Ministry of Justice contracted an impact study to assess the practical effects of the four codes. The preliminary findings indicated that the Civil Code would be the least cumbersome to implement, and would respond to a real need to modernize the legislation. The previous Civil Code dated back to 1864 and had been amended extensively over the years, with the most significant changes made under the communist regime. The new Civil Code also brings together provisions that were previously included in the Commercial Code and the Family Code.
While the necessity of reforming the civil legislation was widely acknowledged, both the judiciary and civil society groups have criticized the lack of preparatory measures to ensure a smooth transition to the new code. Only a handful of seminars were organized for judges, lawyers, bailiffs, and public notaries; the responsibility for digesting the new legislation fell largely on the shoulders of each individual. One of the new members of the Superior Council of Magistrates, Judge Cristian Dănileţ, has taken upon himself the task of coordinating the various training efforts conducted by the representatives of each legal profession, in part so that resources are fairly shared among them. In addition, the Ministry of Justice has established a website to post information on the new legislation and the main changes it brings about. Some trainings were carried out for the other new codes in 2011, but the need for further efforts remains substantial. The Civil Procedure and Criminal Procedure Codes in particular deserve significant attention, since they will change profoundly the way in which the judiciary operates.
The beginning of 2011 marked a new start for the Superior Council of Magistracy, with a new membership chosen at the end of 2010. However, some former members were reelected to serve on the council despite the one-term limit established by law. After parliament appointed all the elected members, the Constitutional Court was asked to determine whether their situation was fully in line with constitutional requirements. Unsurprisingly, the court decided (i) to invalidate the mandates of three elected magistrates who had served before, and (ii) to invalidate the mandate of one of the representatives of civil society, on the grounds that he held two positions at the same time, and ban him from public office for three years.
New elections were organized for the posts vacated by the Constitutional Court’s decision, and replacement magistrates were finally installed by midyear. To allow the council to operate in the meantime, the government modified the rules regarding the quorum needed for the body to take various decisions. Nevertheless, the disruption and legal struggles marred the institution’s public image.
Changing the system of promotions to the High Court of Cassation and Justice to ensure transparency, fairness, and a merit-based decision-making process was one of the electoral promises of the reformist members of the Superior Council of Magistrates. The main component of the existing system is an interview before the council, and it has been widely criticized for relying on excessive discretionary powers in the absence of any firm selection criteria. The council introduced some changes at the beginning of the year, but the courts invalidated them on the grounds that they exceeded the council’s legal authority. The main actors in the judiciary—the Superior Council of Magistrates, the High Court of Cassation and Justice, and the Ministry of Justice—failed to agree on the details of a new promotion procedure being debated by parliament, and as a result the bill was rejected and the old procedure remained in place.
A series of high-profile cases in 2011 illustrated the depth of the corruption problem in Romania, the various obstacles that frequently hamper or derail prosecutions, and the ongoing efforts of certain institutions to improve detection and punishment of graft in spite of these obstacles.
In an unprecedented, far-reaching investigation, the National Anticorruption Directorate (DNA) indicted more than 200 police and customs officers during the year, most of whom were arrested on corruption charges. Special investigative means, such as undercover work and surveillance techniques, were deployed to build these cases. The General Directorate for Anticorruption, a unit within the Ministry of Internal Affairs, was also involved in the operation. Another DNA investigation into the port of Constanta targeted the secretary general of the Ministry of Internal Affairs and a member of parliament from the PDL.
Separately, a media investigation conducted by British journalists showed that at least three members of the European Parliament (MEPs)—among them Adrian Severin of Romania’s PSD—were willing to advance certain pieces of legislation in exchange for money. The DNA sought to follow up on the media reports, but it first had to overcome Severin’s immunity as an MEP. The European Parliament had to lift the immunity even for prosecutors to be able to investigate him, and had to grant a warrant for his office and computer to be searched. Notably, Severin was the only accused MEP who had to have his immunity lifted, as the others either resigned from office after the scandal broke or did not enjoy any immunity according to the laws of their own countries.
Another investigation with international implications centered on Gabriela Barsan, chief justice of the Administrative Litigation Section at the High Court of Cassation and Justice. Her husband, Corneliu Barsan, is a judge at the European Court of Human Rights (ECHR). Gabriela Barsan was accused of influencing her colleagues to make decisions that favored a particular businessman from whom she received various benefits. Romanian anticorruption prosecutors asked for a search warrant for the couple’s home, and the warrant was issued by the High Court of Cassation and Justice, with the prior approval of the Superior Council of Magistrates. After the search was conducted, however, Gabriela Barsan produced a letter from the president of the ECHR, who expressed concern that the search might not have taken into consideration the immunity of Corneliu Barsan as it extended to the family domicile. The Romanian authorities decided to formally ask the ECHR to lift its judge’s immunity so that the investigation could continue. The court ultimately complied, but it also upheld the general principle that the immunity of an ECHR judge extends to his or her spouse, who cannot be investigated or searched without the prior approval of the court.
In the autumn of 2011, two high-level corruption cases came to light in Cluj, the constituency of Prime Minister Emil Boc. They involved Radu Bica, the vice president of the Cluj county council, and Sorin Apostu, the mayor of Cluj, both of whom were powerful members of the PDL. They were arrested on bribery charges, causing turmoil in the ruling party, but PDL members largely acquiesced to the criminal proceedings against their colleagues. This contrasted with another case earlier in the year, when opposition politicians protested the arrest of PSD member Constantin Nicolescu, president of the Arges county council.
There were also four convictions against members of Parliament in 2011, two of which were finalized and two of which were still subject to appeal, as well as a visible acceleration of high-level corruption proceedings against ministers and MPs at the High Court of Cassation and Justice. The new management of the High Court, and of the criminal section in particular, was attempting to avoid triggering the statute of limitations for these cases, which had already dragged out for years. While the decision to hold more frequent hearings was welcome, it remained to be seen whether the effort would come too late for the pending cases. With respect to other corruption cases before the courts, the positive effects of a recently introduced mechanism for facilitating guilty pleas could already be seen in the overall shortening of trials.
The ANI, the body tasked with the verification of public officials’ declarations of assets and interests, has continued to refer cases to the Wealth Investigation Commissions attached to the Courts of Appeal, or directly to courts. In one such case, Labor Minister Ioan Botis of the PDL was forced to resign in early 2011 due to conflict-of-interest allegations. The ANI conducted investigations of MPs, mayors, and heads of various administrative institutions. However, among other difficulties, the agency faced serious challenges in securing an acceptable budgetary allocation from parliament for 2012.
In June the Constitutional Court reviewed proposals to amend the constitution and invalidated two of the most important changes for rule of law and anticorruption: (i) the limitation of the immunity from prosecution enjoyed by cabinet ministers and members of parliament and (ii) the elimination of a constitutional provision that blocks the investigation of illicit enrichment. The immunity rule has shielded senior politicians from corruption investigations in the past, and the constitutional assumption that all personal wealth is acquired legally has protected unexplained fortunes from scrutiny and seizure. The Superior Council of Magistrates had issued an opinion just before the Constitutional Court ruling, arguing against the elimination of the wealth rule despite the fact that the topic lay beyond the limits of the council’s competence.
 International Monetary Fund, Romania: Letter of Intent, and Technical Memorandum of Understanding, (Bucharest: IMF, 14 September 2011), http://www.imf.org/external/np/loi/2011/rou/091411.pdf.
 Claudia Pirvoiu, “Raport critic al Bancii Mondiale” [Critical World Bank report], HotNews.ro, 18 July 2011, http://economie.hotnews.ro/stiri-energie-9445264-exclusiv-raport-banciim....
 Claudia Pirvoiu, “Cum vor fi platiti managerii privati de la companiile de stat” [How to pay the private managers of state companies], HotNews.ro, 12 September 2011, http://economie.hotnews.ro/stiri-companii-10104329-cum-vor-platiti-manag....
 Ovidiu Maricea, Roxana Preda, and Mariana Bechir, “Miniştrii marionetă şi stimulentele nesim-ţite de la Finanţe” [The puppet ministers and immoral bonuses in the Ministry of Finance], Adevarul.ro, 18 October 2011, http://www.adevarul.ro/actualitate/eveniment/Stimulentele_si_sistemul_cl....
 “Law on Social Dialogue #62/2011 removed the national and branch level of collective negitiation,” European Labour Law Network, http://www.labourlawnetwork.eu/national_labour_law/legislative_developme....
 “Ioan Oltean, secretar general PDL: Alegerile comasate vor avea loc in noiembrie 2012” [Ioan Oltean, PDL Secretary General: merged elections will be held in November 2012], HotNews.ro, 9 September 2011, http://www.hotnews.ro/stiri-politic-10077058-ioan-olteansecretar-general....
 Laws 215/2001 and 286/2006 provide for such a possibility only in justifiable cases of emergency, which strictly speaking do not apply here.
 A national PSD leader said his party would agree to merged national-local elections provided they are held early in 2012, and not in November. “Dan Sova, la TVR Info: Vrem alegeri comasate in luna iunie, nu in noiembrie [Dan Sova, TVR Info: We want merged elections in June, not November], HotNews.ro, 8 December 2011, http://revistapresei.hotnews.ro/stiriradio_tv-10891159-dan-sova-tvr-info....
 This was due in part to negative natural growth, but mainly to outward migration.
 George Sava, “Vot uninominal, intr-un singur tur de scrutin, la alegerile din 2012” [Single vote in a single round in the 2012 elections], Paginiromanesti.ca, 19 August 2011, http://www.paginiromanesti.ca/2011/08/19/vot-uninominal-intr-un-singur-t....
 “De ce se teme UDMR de votul uninominal pur” [Why UDMR fears a pure, first-passthe-post vote system], Evz.ro, 30 August 2011, http://www.evz.ro/detalii/stiri/de-ce-se-temeudmr-de-votul-uninominal-pu....
 “Declinul PC: fără candidaţi şi marginalizat in USL” [Declined PC: no candidates and marginalized in USL], Romanialibera.ro, 3 October 2011, http://www.romanialibera.ro/actualitate/politica/declinul-pc-fara-candid....
 “PRO și CONTRA privind votul prin corespondenţă pentru romanii din diasporă” [Pros and Cons of vote by mail for Romanians living abroad], Adevarul.es, 29 January 2011, http://www.adevarul.es/stiri/actualitate/pro-contra-privind-votul-coresp... “PSD și UDMR au rezerve serioase faţă de votul prin corespondenţă” [PSD and UDMR have serious reservations about voting by mail], Romanialibera.ro, 6 September 2011, http://www.romanialibera.ro/actualitate/politica/psd-si-udmr-au-rezerve-....
 Cristian Ghinea, “Reţeta pentru noul partid. Caţi v-aţi băga?” [Recipe for the new party. How many of you would join?], Contributors.ro, 18 February 2011, http://www.contributors.ro/editorial/reteta-pentru-noul-partid-cati-v-at....
 “Miscarea Noua Republica” [Movement New Republic], Evz.ro, 4 November 2011, http://www.evz.ro/multimedia/video/filtrare-dupa-tag/tag/miscarea-noua-r....
 European Bank for Reconstruction and Development (EBRD), Life in Transition Survey: After the Crisis (London: EBRD, 29 June 2011), http://www.ebrd.com/downloads/research/surveys/LiTS2e_web.pdf.
 Data from “Asociatia pentru Relatii Comunitare” [Association for Community Relations], Doilasuta.ro, http://doilasuta.ro/continut/index.php/rezultatele-campaniei/rezultate-c....
 Adelina Mihai, “Inflaţia de ‘patronate fără patroni’ subminează reprezentarea businessului romanesc” [Inflation of ‘employees without employers’ undermines the representation of Romanian business], Zf.ro, 26 September 2010, http://www.zf.ro/analiza/inflatia-de-patronate-fara-patroni-submineaza-r....
 Mihaela Lambru and Ancuţa Vamesu, Romania 2010. Sectorul Neguvernamental: profil, tendinte, provocari [Romania 2010. NGO sector: Profile, trends, challenges] (Bucharest: Fundaţia pentru Dezvoltarea Societăţii Civile [Civil Society Development Foundation], 7 October 2010), http://www.fdsc.ro/library/conferinta%20vio%207%20oct/Romania%202010_Sec....
 William Totok, “Bodo Hombach: “Mass-media din Romania, in mare parte in miinile unor oligarhi” [Bodo Hombach: The media in Romania is mostly in the hands of oligarchs], Rfi.ro, 11 January 2011, http://www.rfi.ro/articol/stiri/social/bodo-hombach-mass-media-romaniama....
 Discussion with owners of news portal operations.
 Mircea Marian, “Război civil in PSD pentru Realitatea TV” [PSD’s civil war for Realitatea TV station], Hyderpark.ro, 24 October 2011, http://hydepark.ro/articol/articol/razboi-civilin-psd-pentru-realitatea-....
 “Miscarea Noua Romanie” [New Romania Movement] and “Impreună 2012” [Together 2012] are two such initiatives launched as manifestos on Facebook.
 These bills, advanced by PSD senator Olguţa Vasilescu, PDL deputy Silviu Prigoană, and PNL deputy Ioan Ghişe, had aimed to introduce state monitoring of the internet for obscene content, extend the regulatory supervision of print media to electronic media, and enforce “politically balanced” news coverage on television.
 Council of Europe, Local Government in critical times: policies for crisis, recovery and sustainable future (Strasbourg: Council of Europe, 2011), http://www.ccre.org/docs/Local_Government_in_critical_times.EN.pdf.
 Discussions with mayors during the Balkan Local Governments conference in Borovets, Bulgaria, June 2011.
 A 7:1 rule was applied to the whole public sector: one new person could be hired only if seven other positions were terminated.
 See “Concluziile raportului anual SAR 2011” [SAR conclusions annual report 2011], Societatea Academică din Romania, http://www.sar.org.ro/concluziile-raportului-anual-sar; “Prin deciziile privind Fondul de Rezervă, Guvernul joacă rolul Parlamentului. IPP cere Parlamentului să preia dreptul suveran de a decide asupra destinaţiei cheltuielilor din bani publici” [By deciding on the Reserve Fund, the government plays the role of parliament. IPP ask the parliament to take the sovereign right to decide expense of public money], Institutul pentru Politici Publice, 29 November 2011, http://www.ipp.ro/pagini/prin-deciziile-privindfondul- de-rezerv.php.
 “Rezultate Finale. Alegeri Neamt: PDL caştigă in faţa USL 56% la 44%” [Final results. Elections in Neamt county: PDL beats USL by 56 percent to 44 percent], Evz.ro, 22 August 2011, http://www.evz.ro/detalii/stiri/pdl-sau-usl-cine-a-castigat-parlamentare....
 Romania already has eight such regions, but they exist only as virtual statistical units.
 The council is composed of 19 members, of whom three hold their seats ex officio (the president of the High Court of Cassation and Justice, the prosecutor general, and the minister of justice) and two are representatives of civil society selected by parliament. Nine judges and five prosecutors directly elected by their colleagues account for the remaining members. All are appointed formally by the parliament.
 Victor Alistar, head of Transparency International, Romania.
 Horatiu Dumbrava, Adrian Neacsu, Cristian Danilet, and Alexandru Serban.
 In Romania, search warrants for the residences of judges and prosecutors can only be issued by courts with prior approval from the Superior Council of Magistrates.