Ciolacu government’s first attack on the free market economy. The capping of the mark-up, a blatant interference in market rules / Iohannis and PNL, no reaction

The capping of the commercial markup on producers and shops by emergency ordinance, proposed by Prime Minister Ciolacu, is a fundamentally wrong political decision with long-term effects. It is a purely communist measure that ignores a sacred principle: prices are set by the market, not by politicians. This is how the economy was run in the Ceausescu era: with prices and profit margins imposed by the government. The result was a country with low prices but empty shops.

Marcel Ciolacu is not the first populist in Romania nor in the region. In 2015, another PSD prime minister, Victor Ponta, was waging war on supermarkets and calling for a price freeze. At the time, he too spoke of „the pride of being Romanian” and claimed that „Romania is not a Western colony”. Liviu Dragnea was also fighting with the price of tomatoes and cursing the West. Viktor Orban, Hungary’s authoritarian leader, also froze prices last year, fighting just as hard with the West, which allegedly wants to harm Hungary.

Sound familiar? They are very similar to what Ciolacu put in his own government program: „We fight so that Romanians are no longer the modern slaves of Europe”. The same dangerous propaganda, the stupid victimization, the blaming of the West for the internal failure. In fact, an excuse for the failure of their own misguided policies.

Now Ciolacu wants to abolish by ukase a law impossible to defeat: the free market law. No one, ever, has been able to defeat the market. Look at Cuba today, at neighboring Hungary, remember communist Romania. All attempts led to shortages.

The explanation is simple: faced with an arbitrary decision, producers will either place the loss on other products or stop producing/processing food that does not bring them profit. Ditto for traders. It is impossible for Marcel Ciolacu not to remember the empty shop shelves before the revolution. After all, perhaps he too was driven by hunger to fight for the downfall of the dictator Ceausescu.

Ciolacu’s OUG sets an extremely dangerous precedent. Today they are capping food additives, and society is not reacting. Tomorrow they may cap fuel surcharges. The day after tomorrow on clothes, the day after tomorrow – on solar panels or second-hand cars. Nothing is stable anymore, no Romanian or foreign investor is safe, and nobody can make a long-term plan.

The danger of arbitrariness is palpable. No economic sector is safe.

And what Ciolacu is doing with food prices is not unique. Both the PSD and the PNL have been going around prices for a year now, trying to find solutions from the tip of the ministerial pen. They tried with gas stations, then with milk, and they are tempted to intervene with tomatoes or potatoes.

And society is silent. Everyone has their reason. Businesses in the sector (producers, processors, distributors and shops) are afraid of power being misused: controls by the tax authorities, the labor inspectorate or dozens of institutions at the mercy of politicians. The way the PSD and PNL make the laws in Romania, nobody is 100% clean. A large part of the press is silent because it receives money from the PSD and PNL.

PNL is also silent because it is saddled by PSD. There is nothing liberal left in this party under the leadership of General (r) Ciucă. It wouldn’t hurt them to adapt a bit to the times and change their name to PSD – the wing with the epaulets on display.

About President Iohannis there is not much more to say. He’s absent anyway and totally surrendered to Ciolacu. Just remember that in the 2019 campaign, he considered the market economy a „keystone of normal Romania”. In the meantime, he capitulated to the PSD, handed over the Cotroceni Palace and misplaced the keystone.

There’s still hope. That part of civil society and the economic environment, those who strongly believe in economic freedom, refuse to remain silent and reject the unprecedented interference of the PSD-PNL government in the economy. There is still time to stop this threatening precedent.

Unfortunately, Ciolacu has not only moved from deeds to words (see the pseudo-reform of special pensions), but also from a market economy to a socialist economy.