Press Release

Axing corporate governance rules for SOEs, another measure that deepens mistrust

The members of the Foreign Investors Council have noticed recently a significant increase in distrust in public institutions, both from the business environment (FIC business sentiment index[1]) and citizens (latest Eurobarometer[2]), due to the numerous legislative changes that affect the economy and the rule of law in Romania.

On the political agenda of the authorities there are a number of decisions which, in our opinion, will lead to the weakening of the rule of law and the normative framework necessary for a modern economy:

  1. The Parliament has just adopted a law that exempts most state-owned companies from the rules of corporate governance;
  2. There is increased political interference in the work of regulatory authorities, which should be independent;
  3. Legislative proposals that call into question the separation of powers and the capacity of the judiciary to ensure compliance with laws and regulations.

All the above are breaching fundamental elements and principles for a modern country with a competitive economy that ensures the welfare of its citizens. These decisions, taken without consultation and without proper information to the public and the business environment, will provide further arguments for deepening the mistrust in institutions. Moreover, without corporate governance rules for state owned companies, Romania will not fulfil the criteria for joining the Organisation of Economic Cooperation and Development (OECD) an objective included in the foreign policy chapter of the governing program.

Romania's long-term potential, including that of becoming one of the most important EU economies, can be achieved by channeling all energies towards such a major objective and by observing the principles of transparency, stability and predictability.

[1] FIC Business Sentiment Index, September 2017

[2] Standard Eurobarometer 88, Autumn 2017