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01/10/2016

Romanian finance minister resigns over corruption allegations

Justice & Home Affairs

Romanian finance minister resigns over corruption allegations

Darius Vâlcov

Romanian government

Romanian Finance Minister Darius Vâlcov resigned yesterday (15 March), after prosecutors opened a criminal investigation into suspected abuses of power in his former role as a mayor.

Vâlcov is the most senior sitting Romanian politician to resign because of corruption allegations, amid a flurry of high-level investigations and graft trials over the past two years. He has denied taking a bribe.

Romania is seen as one of the European Union’s most corrupt states but its prosecutors and magistrates have won praise from Brussels for crackdowns that have seen many members of parliament face trial.

Prosecutors said on Friday they had opened a criminal investigation against Vâlcov on suspicion he favoured a company for a public works contract in exchange for about €2 million during 2010-2013 when he was a mayor.

“I spoke with Darius Vâlcov today at lunch and he handed me his resignation,” left-wing Prime Minister Victor Ponta told television station Romania TV. Ponta said he had accepted the resignation but gave no further details as to why Vâlcov had quit.

Neither Vâlcov nor ministry officials were immediately available for comment.

Ponta said he would propose a replacement after Vâlcov finalised a new fiscal code in the coming days to cut taxes and presented it to the government for approval “because it is important for Romania to have this project”.

Ponta and Vâlcov announced plans in February to cut all major taxes between 2016 and 2019, a move analysts said could take an unsustainable toll on the budget.

A former two-term mayor turned senator in parliament, Vâlcov took over as finance minister in December in a cabinet reshuffle following Ponta’s defeat in the 2014 presidential election. He had previously been the budget minister, a portfolio that was merged with the finance ministry post in the reshuffle.

President Klaus Iohannis asked Ponta earlier on Sunday to start the process of replacing Vâlcov, saying he was “affecting the activity and credibility of the government”.

The investigation is another blow to Ponta, after he was surprisingly defeated in November’s presidential election. Ponta’s father-in-law and brother-in-law are under criminal investigations in separate cases.

His ruling Social Democrats have a party congress this month where his leadership may be challenged, while opposition centre-right politicians have said they aim to file a no confidence vote against him in parliament this year. The next parliamentary election is due at the end of 2016.

Background

When Bulgaria and Romania joined the EU on 1 January 2007, shortcomings remained regarding judicial reform and the fight against corruption. In the case of Bulgaria, problems also remained regarding the fight against organised crime.

A Cooperation and Verification Mechanism (CVM) was set up to assist both countries with judiciary matters after their EU accession. Seven years after their accession, the CVM is still ongoing and will continue under the next EU Commission. 

Lately, the Commission reported under CVM every year with reports on progress with judicial reform, the fight against corruption and, concerning Bulgaria, the fight against organised crime. The last report on Romania was largely seen as positive.

>> Read: Romanian leaders endorse the Commission’s monitoring report conclusions