For whom bells toll?

Let’s face it, this is not a simple year for Romanian economy. Amid a surge in national-populism, the economy has been simply forgotten by the people in power in their struggle for the control of the judiciary and the justice system. The real economy was there just to provide taxes to be used to bribe the audience and to buy the loyalty of the troops.

But 2019 is a special year for another reason. In 2019, we celebrate 10 years since the Guinness Book of Records crowned Mugur Isarescu as the longest-serving Central Bank governor in the world. As if to properly mark the event, the Romanian Parliament passed a law on the repatriation of Romania’s gold reserve deposited with the Bank of England. The bill was put forward by the right honorables Liviu Dragnea, Social Democrat Party deputy, and Serban Nicolae, Social-Democrat Party senator. Under the new piece of legislation, the National Bank of Romania is to repatriate 91.5% of the Romanian gold reserves stored abroad. The opposition criticised the measure as populist, prone to damage Romania’s financial credibility on the international markets, but found itself helpless in front of the PSD-ALDE voting machine. One may say that this patriotic effusion “bring back our gold” is just another campaign slogan, alongside “Romanians deserve more”, but it is more than that. It’s an insult to the work carried out by Isarescu during all these years. Let’s just recall that the gold reserve has been deposited with the Bank of England since 1999, when Romania was facing the deepest post-communist economic crisis.

Liviu Dragnea: “I’ve never heard Mugur Isarescu challenging this bill. Within BNR, there were a lot of people who said many lies, nonsenses, preaching that our ruling program will never work in Romania, and they have been proved wrong. I endorse this bill,” said Dragnea.

In a seemingly unrelated action, Senator Daniel-Catalin Zamfir initiates a parliamentary inquiry into the circumstances surrounding the speculative attack against the Romanian national currency in October 2008. Then, in just four days, the Romanian currency fell from 3.72 RON/EUR to 3.94 RON/EUR, a 5.6 pc fall. Subsequently, on October 6, BNR stepped in and by the end of that month Romania lost nearly one billion EUR. Obviously, one may question the wisdom and usefulness of opening a parliamentary inquiry into an event that happened a decade ago and has already been investigated by the Competition Council. At that time, the Competition Council ruled that there had been no foul play and the Romanian banks didn’t break the competition law.
So, what’s the urgency for another inquiry led by a Senator trained as a civil engineer, who has made attacking the banking system his lifelong undertaking? Well, there is…Did I tell you that Mr. Isarescu’s mandate at the helm of the Romanian central bank is also coming to an end this year? In the Romanian mandarin culture, a public enquiry commission is not meant to improve (things), but to remove (people). So, the (forgone) conclusion of the parliamentary commission led by Senator Zamfir is that the 10-year-old Competition Council report – which, accidentally, was supervised and validated by the European Commission – is more-or-less a cover-up. According to the parliamentary commission led by the builder-turned-banking guru, 10 years ago a dozen or so Romanian banks plotted to fix the ROBOR index and the Competition Council’s Chairman, Bogdan Chiritoiu, did nothing and, therefore, he has to go now.
BNR’s Nicolae Cinteza has to go too because he was not vigilant enough. In a rare interview, Mr. Cinteaza ridiculed the parliamentary report and the ones who laid siege to the Romanian National Bank.
Borrowing from snooker jargon, this is a three-cushion strike against Mr. Isarescu, in which poor Bogdan Chiritoiu (who usually clicks his heels quite timely and convincing) is a collateral victim. The key word of the report is not “competition” but ROBOR, the interest rate index vilified by the pro-PSD circles as the evil instrument that crucifies the “poor Romanian borrower”. And ROBOR is Isarescu’s business, and therefore Isarescu himself, as a defender of ROBOR and the greedy foreign banks, is unpatriotic and therefore he has to go.
But what are the reasons why Mr Dragnea is so taken by the idea of removing Mugur Isarescu once and for all? There are the obvious ones: the Government badly needs to get its hands on the money printing machine and make it work in accordance with the party’s economic policies, and, secondly, the Government needs a less critical central bank governor.
However, it is my strong belief that the dispute between Mr. Dragnea and Mr. Isarescu has become rather personal.
To start with, BNR is the only major institution of the state that hasn’t been “Teleormanised”, infiltrated by cronies of the PSD chairman: people with fragile academic record, no relevant professional experience, but spineless and willing to execute without remorse whatever the Great Leader orders them to do. So far, the entire institution has stood fast, there are no cracks, and even vice-governor Florin Georgescu “the Red” has not switched alliances, nor did he make any professional compromises. On the contrary. Mugur Isarescu is everything that Liviu Dragnea wants to be and cannot be: respected, knowledgeable, flawless in economic reasoning, professional, well-spoken (in foreign languages too), well-received by foreign dignitaries, a diplomat. Such high standards have
to be eradicated.

    The material is also available in our print edition of Business Arena.