Romania’s new German President: Where do we go from here?

Jonathan Scheele (SEESOX Associate; Senior Member, St Antony's College, Oxford)

On 27 January, SEESOX organised, in cooperation with the Department of International Development, a lunchtime seminar on “Romania’s new German President: where do we go from here?” the panel of speakers was made up of Laurentiu-Mihai Stefan, from the Romanian President’s Office, Michael Taylor, of Oxford Analytica, John Beyer, of St Antony’s, Corneliu Bjola of ODID, and Jonathan Scheele, of St Antony’s.

In November 2014, Romania elected a new President in the second round, pitching the current Prime Minister, Victor Ponta, of the Social Democratic Party, against Klaus Iohannis, of the National Liberal Party, an ethnic German and Mayor of the Transylvanian city of Sibiu. The election results were heavily influenced by a massive turnout of the (mainly young) Romanian diaspora, queuing all day outside embassies across Europe to vote – and in many cases failing to get through the door before the polls closed. And, in their frustration, they used social media to encourage relatives and friends back home to vote against the current government. So what does the election of this – relatively – new figure in Romanian national politics, not a Romanian ethnic, though married to one, mean for the next five years – or ten if he is re-elected for a second term – in Romania?

Laurentiu Stefan is a political scientist, who has spent the last ten years working as a political analyst for the US Embassy in Bucharest and has now joined the new President’s team. He recalled that, as Mayor of Sibiu, Iohannis had acquired a reputation as “a good manager who completes projects”; this contrasted with the general experience in Romania, where there are many projects, but few completed. Interestingly, Iohannis had always been a leader in opinion polls, alongside non-political figures (Central Bank Governor Mugur Isarescu and Syrian-born ethnic Palestinian doctor Raed Arafat) and ahead of established politicians. Stefan stressed Iohannis’ tendency to keep a relatively low profile – “deeds, not words”.

He commented on Iohannis’ manifesto, which was in two parts. The second – as is traditional - focused on big topics where Iohannis saw the need for a national debate leading to a consensus; these included education, health, competitiveness, and so forth. But the first (much longer) part of the manifesto reflected Iohannis’ philosophy and views on his role as President and would bear careful examination. He saw it as important that the President inspire respect and motivate people and institutions (unlike his predecessor), so that Romania could become “a normal country, like others in Europe”. Politics should focus on public service, not personal enrichment.

Michael Taylor looked at the economic situation. With parliamentary elections in 2016, he wondered whether the President might have an interest in the present government not restoring growth. In fact, the forecasts looked relatively positive, with annual growth to QIII 2014 of 3.1% likely to continue through 2015, and inflation falling. Official interest rates are at 2.5%, a historic low in Romania.

But though the signs are mostly positive, there are risks; the impact of the Swiss Franc revaluation on private debt, the possible impact on competitiveness of the Leu rising against the Euro, and the possible impact on the banking sector of developments in Greece. Taylor saw an opportunity for Iohannis to come forward and push for serious reforms to improve the sustainability of Romania’s economic performance.

Corneliu Bjola felt that Iohannis’ election, if not an “Obama moment”, nonetheless gave a feeling of something fresh. He was a different kind of politician; though this could also have been said of President Emil Constantinescu in 1996, whose accomplishments did not match the huge expectations. For Bjola, looking at foreign policy, where the President has the lead (as opposed to domestic policy, which is the government’s responsibility), a clear strategic idea was so far lacking in Romania. As a result, Romania inevitably let others define its policy for it. But was Iohannis a big picture person? What direction should Romania pursue as an EU Member State? Unless Romania began to contribute to policy at the EU level, it would never be taken seriously by others. Iohannis should be asking himself how he and his country could become a contributor.

Implementing that vision required focusing on specific policy areas – for example, energy, or migration. Couldn’t there be an effort to reach out to try to find common ground on migration? In implementing his vision, Iohannis was also hampered by a very conservative Foreign Ministry; there was need for fresh blood to complement traditional diplomacy – digital diplomacy, improved crisis management, and institutional innovation.

Jonathan Scheele shared the view that Romania had so far failed to pull its weight in Brussels, in contrast with Poland – a similar sized country. Iohannis had limited tools to change things, since he was not an executive President. And he would also have to cope with cohabitation with his former opponent, unless he could manage to leverage a change in the composition of the parliamentary majority in favour of his party. But, even in cohabitation, the experience in 2012 had shown the damage to both sides that public disunity did, not to mention to Romania’s wider international credibility. Had the right lessons been learned?

Iohannis was certainly a different man from his predecessor; his comment in the election debate, “I would rather lose the election than look like a jerk”, was symbolic. Romania needed to develop a clear vision of where it wanted to go and what sort of country it wanted to be. Only in this way would Romania be able to instrumentalise EU membership to realise that vision, rather than simply looking for projects to spend EU money on. Could the new President manage to develop such a vision, eminently political, but transcending party politics? This could serve as a basis to push in Brussels for the development of EU policy initiatives that supported the vision. And to do so, Iohannis needed to cultivate relationships with other like-minded EU Member States.

With a possible ten years ahead of him as President, Iohannis had an opportunity to change the political environment in Romania. But he would only do so if he could get beyond the current political class. The role of the diaspora in the elections had been critical; they had voted strongly in his favour. But was this a vote for him or against his opponent? His manifesto was an encouraging sign that he stood for something, rather than merely being a least worst solution. But could he implement it?

John Beyer noted that, as Mayor of Sibiu, Iohannis had had close contacts with Luxembourg and Mr Juncker, in the preparation of Sibiu’s role as European Cultural Capital in 2007 (together with Luxembourg). Might he be able to use those contacts in their respective new roles? He also noted the importance ascribed in the manifesto to Moldova and encouraging its EU aspirations. Moldova needed a lot of help and Iohannis seemed more likely to offer practical help than the sometimes clumsy interventions by his predecessor and the current government. References to reunification are unhelpful, particularly to those in Transnistria, but also in other parts of Moldova. He should also push for greater speed in setting up the gas interconnector between Romania and Moldova.

There was a necessarily brief floor discussion, where issues covered included:

• The dangers of a brain drain due to disappointed hopes – Iohannis must back his words by deeds;

• The capacity of Romanian banks to finance the vitally necessary investment in infrastructure;

• How far the CVM (EU monitoring) and EU funding had encouraged reform in Romania;

• The paradox of a non-ethnic Romanian seeming to have a better concept of Romanian identity than any of his predecessors;

• The need to encourage young, educated Romanians to return and to work in the public administration, without their ideas being rejected;

• The need for educational reform;

• Was the issue of exploitation of Romanian migrants in western Europe an issue?

The comments made in reply included:

• Migration was a good topic, despite its sensitivity in the UK. Romania needed to reach out and, rather than be defensive, be ready to discuss what could be done; but was it yet on Iohannis’ radar?

• Romania’s elite had a problem – they didn’t take foreign policy seriously and saw it primarily as an opportunity for photo ops and taking selfies with foreign leaders A more serious approach was vital;

• On banking, most were foreign-owned, with consequent implications for contraction of assets outside the home country, but EU funding was available; the problem was Romania’s failure to access it and, in this respect, there was also a need for Romanian co-funding; in some instances, private banks had a major role to play, which government need to facilitate;

• The CVM had played a role, but ultimately Romani’s elite and its government had to internalise the reforms; outside pressure alone would be insufficient;

• Similarly, public administration reform was very challenging and conservatism was its enemy; furthermore, there was now far too much emphasis on a “spoils system” verging on clientilism;

• On Romanian identity, it was a paradox that Romanian identity since WWII had been constructed with no reference to German ethnicity in Romania; and what about other minorities? Romania still lacked in many ways a civic identity, as opposed to a state one;

• Iohannis has promised a public debate on education and is seeking ideas from experts.

This was a first discussion on the challenges facing Romania as it embarks on the first year of the Iohannis Presidency. It would be interesting to meet again in January 2016 to look at how things have gone and what has been achieved.