Ciolacu, the new Dragnea. The PSD is gearing up for a private sector apocalypse in 2025, with the PNL eagerly playing the role of accomplice

Through the pension increase movement, the PSD has pushed the PNL into a political trap. Initially, the Liberals growled just enough for the PSD to launch a communication campaign describing the PNL as an opponent of pension increases, painting a bad image for PNL among pensioners. Subsequently, the PNL agreed to the increases, annoying the right-leaning citizens. In just one week, the PNL came to be detested by both pensioners and the active public. It’s the perfect scenario for Ciolacu, who dreams of a presidential final with AUR in 2024.

Why is the pension law a deception? Its fiscal impact is so significant that it would unbalance the state budget for years to come. Here are the numbers presented by the Ministry of Finance: in 2024 it would bring an additional expense of 10 billion lei, and in 2025 of 33 billion lei. But these increases are added to the mandatory ones scheduled for January 1, 2024, and January 1, 2025, which would increase pensions with an equal percentage with that of the inflation rate. In January 2024, this increase will be 13.8%, the inflation rate from the previous year. And all these additional expenses come on top of this year’s substantial budget deficit overrun. Let’s be clear: increasing pensions on a correct calculation basis is a necessity, a foundation of civilization. But their unsustainable increase, without the mandatory administrative reforms to release the necessary funds, is just dangerous populism.

Where does the PSD plan to get the money for the pensions? In public statements, Ciolacu has indicated combating tax evasion as a source of funding. This is a joke, dust thrown in the eyes of the pensioners who – rightly so – don’t care where the government gets the money. First, no reform measure of the ANAF (the Revenue Agency) could produce effects so quickly. Second, how can we believe that PSD wants to reform the ANAF when the PSD encourages and tolerates tax evasion by delaying the installation of scanners in customs or by supporting a character like Ionuț Mișa at the Large Taxpayers’ Directorate? It’s the same Mișa whom the Court of Auditors accuses of not wanting to tax a group suspected of evading taxes on 230 million lei worth of alcohol.

The reality is different, and even Marcel Ciolacu has said it publicly. The money will come from tax and duty increases for employees in the private sector and private companies. „We need to come up with a predictable, fair fiscal reform in 2025-2026,” Ciolacu announced on Monday. He has given details about the reform over time, through attacks on capital and by supporting the progressive taxation of incomes.

For 2025, PSD is preparing to tax dividends at 16%, from a current rate of 8%, a progressive taxation system that will seriously take away from the money of employees with incomes over 5,000 lei, further burdening micro-enterprises, plus another attack on Pillar II pensions, according to G4Media information.

And the Liberals, led by civil servants who have never worked a day in the private sector – Iohannis and Ciucă – have proven to be the perfect minions for the PSD. With the exception of Dan Motreanu, Rareș Bogdan, and a few other local voices, the PNL leaders swallowed the bitter pill without any effort. Moreover, as Nicolae Ciucă’s Monday post shows, they even appeared happy to participate in the decision that will bury the private sector.

I have written countless times that there is almost nothing liberal left in Liberal Party, except for the name.

Today proves it once again. Ciucă’s people are setting a new illiberal standard today, agreeing to trample, along with the PSD, the role of Parliament, the fundamental institution of democracy. Hand in hand with PSD, the Liberals are passing the pension law through the Senate in a single day. A mockery of debate. It shows how low the party that prides itself on its democratic tradition has sunk in the Iohannis-Ciucă mandate.

The unsustainable increase in pensions and the preparation for the attack on the private sector in 2025 is the logical result of the creation of the grand coalition two years ago by President Klaus Iohannis. The former Grivco prime minister handed over governance to two parties whose goal is to destroy any intention of reform (see the farce of special pensions) and to maintain power by any means.

I wrote in September 2023 that Ciolacu had triggered a tectonic shift with the austerity ordinance: he abandoned the friendly attitude towards capital and moved to left-wing populism that penalizes business performance.

However, I fear that it’s much worse than that. Ciolacu’s populism will trigger a chain of effects with unimaginable destructive potential. After all, let’s not forget that the budgetary slippages since 2020 have been caused by the policies of Liviu Dragnea. A new package similar to Dragnea’s will simply pulverize the private economy and economic freedoms.