December 30, 2004
New government
As of yesterday (Wednesday), Romania has a new government.
It's a coalition between the Alliance, UDMR, and PUR. The Prime Minister, Mr. Tariceanu, is from the Democratic wing of the Alliance -- President Basescu's party.
Their first action has been to pass a flat tax, setting a uniform tax rate of 16% for both corporate and income tax. This is not a new thing in Eastern Europe; Estonia, Latvia, Russia, Ukraine and Slovakia all have flat taxes. However, the Romanian tax will be lower than the Baltic States (24%) or Slovakia (19%), while applying more broadly than the Russian or Ukrainian taxes (which are set at 13%, but only for personal income).
This was done last night, by emergency ordinance. The new tax system will be effective starting in 2005 -- in other words, the day after tomorrow.
If this is typical of what we can expect from this government, it should be an interesting time.
More in a bit.
Posted by douglas at December 30, 2004 11:38 PMActually Calin Popescu Tariceanu is a member of the National Liberal Party since its rebirth in January 1990. Now he is the president of the party and co-president of the PNL-PD alliance. It worth listening (or reading) its parliament speech. It must be mentioned that the meaning of liberal in Romanian is closer to the original meaning of the term.
Posted by: Marian Soare at December 31, 2004 08:33 AMWow! High speed, low drag.
Posted by: Bernard Guerrero at December 31, 2004 02:54 PMMarian, you're quite correct. My bad.
Bernard, this goes to some of the things I like about Basescu, and some of the things that make me a little nervous. Okay, more than a little nervous.
Short version: he's a liberal free-marketer, with all the enthusiasm of a convert. And he's a can-do kinda guy. But (1) his brainstem reflexes are still old-school Communist, and (2) "can-do" somtimes comes out as "authoritarian and totally contemptuous of process".
There's no close American equivalent, but try to imagine a Rudy Giuliani who had been born and raised in Stalin's Russia. Something like that.
Doug M.