"We won't sell off our country" has become the law after 30 years

MIRCEA URSACHE (Translated by Cosmin Ghidoveanu)
English Section / 10 septembrie 2020

"We won't sell off our country" has become the law after 30 years
MIRCEA URSACHE (Translated by Cosmin Ghidoveanu)

Up until recently, nobody issued any public comments on the Law no. 173/2020 concerning some of the measures for protecting the national economic interests.

All of a sudden, the Romanian government has realized how backwards this law is. Thus, starting from an illegally granted state aid by the PSD to CFR Marfă it was decided that through the application of this law, the Romanian government would no longer be allowed to recoup its aid, because the aforementioned law bans the sale of government stakes in national companies and societies, in banks and in any other company in which the government is a shareholder, regardless of the size of the stake. That means that the government, is actually obstructing itself, through this law, as it is unable to recoup a state aid which it itself has granted illegally. If that law didn't exist, CFR Marfă, could have repaid that state aid, through the sale of old, used or decommissioned train cars, including those proposed for casare.

Sure, seeing that the law has as its initiator senator Şerban Nicolae, one can think that the explanation follows from the education in Cotroceni in the "90s, when the slogan in use was "we won't sell off our country".

But the aforementioned law has two major inaccuracies:

First, it is not a law to protect national interests, but rather group interests, of those who, through consulting contracts and leech companies, exploit these national companies.

Secondly: national interests in the economic activity are not even remotely to keep the state as a manager, nor to preserve the lack of transparency (let's not forget that the Tudose government has cancelled many of the corporate governance requirements in companies), nor the reporting of events and data from those companies. National interests are precisely the opposite, and these can be achieved only by listing state owned companies and trading them on the regulated market. Only a listed company can ensure the transparent decision making and the corporate governance according to the European model. Regardless, the Romanian government has only stood to gain from the listing and sale of stakes in companies such as Nuclearelectrica, Transgaz or the share capital increase in Electrica SA.

Who benefits from the preservation of the secrecy in the process for the listing of Hidroelectrica which the Law no. 173/2020 protects? Who benefits from CEC Bank still being a weakly capitalized bank, but with the Romanian state as its only shareholder?

I want to be well understood in my approach, so that the Romanian government is no longer the sole manager in its companies and as an example I will mention the following companies: Adidas, Air Liquide, Airbus, Alliantz, Amadeus, Axa, Basf, Bayern, BMW, BNP Paribas, Daimler, Danone, Deutke Telecom, Deutke Petrol Nokia, Orange, Philips, Vivendi, Sanofi, Santander, Enel, Engie, Eni, Iberdrola, Ing Group, Intesa Sanpaolo, L'Oreal, LVMH, Siemens, Societe Generale, Telefonica, Total, Unilever, Vince and Wolkswagen.

Do you know what these companies mean and what they have in common? They are listed on the stock market and their real market value is known, not the accounting one. They are companies where corporate governance allows majority shareholders to participate in the decision-making process, to check and request periodic reports, as well as reports on any events in the life of companies. They are companies that pay every year to the states they are registered in billions of Euros in taxes, and which also employ millions of people, to say nothing of the dividends paid to shareholders.

Why don't the states in question seek to hold on tight to the majority stakes like they do here, and more than that, to issue a law that is anti-economic and anti-Romania.

The full abrogation of the provisions of the law no. 173/2020 is a necessity, just as it is urgent to abrogate in full Emergency Government Ordinance no. 100/November 15, 2018 which establishes measures for the general framework concerning the generally applicable framework for sovereign funds, EGO which would have allowed one of the most suspicious means of transfer from the state to the private sector. But in a subsequent publication about the need for a sovereign development fund, I will end this with a suggestion. Since the promulgation of Law no. 173/2020 and even that of EGO no. 100/2018 was done without a public debate, we should at least now debate my proposal to abrogate both. I think that the stock market would stand to gain, and institutional and retail investors are eager to see a signal that the economy is recovering.

And similarly, in a very near future I would like to also debate a plan for a sovereign investment fund, which I will take the liberty of drafting.

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