As Brexit Enters Endgame, This Trouble Spot Takes EU Presidency

(Bloomberg) -- No stranger to gaffes, Romania’s prime minister is perhaps best known for one particularly glaring slip of the tongue not long into her tenure.

Addressing colleagues at a government meeting in May -- as well as a live online audience -- Viorica Dancila proudly declared that “we’re reducing democracy.” Despite quickly correcting that last word to “bureaucracy,” the Internet wasn’t in a forgiving mood and the blunder spawned an avalanche of memes that still haunt her.

As the Black Sea nation prepares to take over the European Union’s rotating presidency for the first time, many within the bloc are starting to think Dancila’s original sentiment may not have been far from the mark. Concerns over the rule of law and corruption have triggered warnings from the European Commission and the U.S., as well as the biggest protests since the fall of communism. Comparisons to populist agitators Poland and Hungary are becoming more frequent.

Steering Romania’s illiberal turn is ruling-party boss Liviu Dragnea, who pulls the strings of government despite being barred from the premiership because of a criminal conviction. It’s his blueprint to corral the judiciary and hobble efforts to punish crooked officials that have irked the country’s Western allies. His success will determine whether Romania joins a list of EU trouble spots.

“The indications are that the EU is losing patience,” said Michael Taylor, a political analyst at Oxford Analytica. “It may be learning from the way it’s been defied by Hungary and Poland.”

Sanctions Push

The bloc is pursuing unprecedented sanctions against those countries over risks to the rule of law. Hungarian Prime Minister Viktor Orban, the self-styled pioneer of “illiberal democracy,” has curbed independence of the media, the courts and civil society. Polish leader Jaroslaw Kaczynski has largely followed the same blueprint, though is more ideologically driven.

Buttressed by strong economies, they’re unlikely to back down.

In Romania, the Social Democrat-led coalition is in the midst of a two-year campaign to bring the courts to heel. Critics such as President Klaus Iohannis say the aim is to legalize low-level graft and keep party members out of prison. Hundreds have been charged or convicted in malfeasance probes, prompting the government to remove the chief anti-corruption prosecutor. Demonstrations persist, but numbers are dwindling.

While the Constitutional Court has struck down parts of the judicial makeover, its effects are seeping into Romania’s democracy rankings. Romania scored second-worst in the EU in a recent survey by Bertelsmann Stiftung. It’s rated the same for corruption by Transparency International.

Dragnea is himself battling to avoid a jail term following a second conviction, for abuse-of-office. An appeal hearing is scheduled for next month.

“EU leaders hope to have a real partner in Bucharest for the next six months, not another troublemaker like they already have with Mr. Orban and Mr. Kaczynski,” said Victor Ponta, a former prime minister who’s fallen out with Dragnea and is trying to make a political comeback.

The EU’s gripes have so far been ignored, raising the possibility of cuts in development funds from the bloc’s budget. With Hungary and Poland vowing to veto sanctions against each other, linking financing to democratic standards is becoming an alternative means of punishment. Romania has received a net 32 billion euros ($36 billion) from the EU since 2007.

The presidency, which begins Jan. 1 and runs through June, is a chance to mend fences and make the country’s voice heard on issues such as the budget. “Romania can bring the EU’s east and west to the same table,” outgoing EU Affairs Minister Victor Negrescu said in an interview.

‘Fight’ Approaches

That could prove tricky with the U.K.’s departure date from the bloc set for March, threatening to dominate the agenda.

Either way, the events will focus attention on the host nation at a critical juncture. A European Parliament resolution this week will urge protection of the rule of law, while an update by the EU on Romania’s anti-corruption drive will highlight recent backsliding.

“There will be, in 2019, a fight between liberal democracy and the tendency in a number of countries –- unfortunately mainly eastern European countries –- to go the way of illiberal autocracy,” former Belgium prime minister Guy Verhofstadt told the European Parliament last month. “Just as it did in 1989, Romania will have an important role to play in winning the fight.”

To contact the reporter on this story: Irina Vilcu in Bucharest at isavu@bloomberg.net

To contact the editors responsible for this story: Andrea Dudik at adudik@bloomberg.net, Andrew Langley, Michael Winfrey

©2018 Bloomberg L.P.