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The Buzz in Romania: Interview with Marian Dinu of DLA Piper Dinu

The Buzz in Romania: Interview with Marian Dinu of DLA Piper Dinu

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Marian Dinu, Country Managing Partner at DLA Piper Dinu SCA, starts his report of the Buzz in Romania on the subject of the protests in Bucharest and throughout the country at the end of January and the beginning of February that generated media attention around the world following the ordinance bills proposed by the Romanian Ministry of Justice and secretly approved by the government regarding the pardoning of certain committed crimes and the amendment of the Penal Code of Romania (especially regarding the abuse of power).  

"The protests were a fairly significant development,” Dinu notes, “and they showed that there are certain principles people care about — that winning elections is not a license to do whatever you want.” Still, he said, it's unfortunate how the entire episode happened. “There was an opportunity to discuss the full ramifications of the Abuse of Office offense, and a good debate could have been had, but the manner in which the Government acted foreclosed such a debate. Given what happened, the debate was expressed in simplistic terms — i.e., 'under the law it’s ok to steal RON 200,000'— which is not what Abuse of Office was really about. Stealing is obviously a crime in its own right, already punishable separate from Abuse of Office.” Instead, Dinu reports, Abuse of Office "is when there’s a belief that an official acted against the law, but no evidence exists that a bribe was offered or demanded.” The debate that didn’t happen, he says, "would have involved important questions of how to better define as a matter of law a crime that should exist in the Criminal Code as a deterrent for public officials to abuse their power, but at the same time it should not create an impression that it is so broadly defined that it can be wielded as an indiscriminate prosecutorial weapon.”   

“Instead, what we got was a debate about constitutionality, what is and is not a legitimate exercise of the government’s ability to issue legal decrees, and so on. I believe that what happened in Romania  is a helpful reminder as to what democracy is all about, in an era of rising populism throughout the world, where the ballot box is used to legitimize the ascent of illiberal policies.”  

However, Dinu says, “what is less helpful for the legal industry is that the protests may have eroded the reputation of Romania as a politically stable country, possibly effecting the opinion of foreign investors over the short term.”  

Turning away from the protests, Dinu reports that, from a business perspective, "the most concerning actions of the government were the quite unexpected changes they made to the taxation legislation — particularly the removal of the cap on the amount people and companies need to pay for social security and health contributions.” He explains that “the government came in promising — in a manner that was hardly credible, in a sense — that they would increase salaries and benefits in the public sector without raising taxes. However, this latter pledge was promptly broken, because they altered the way that social security contributions and health insurance contributions are calculated. There was a cap for higher salaries — you only had to pay the percentage contribution equivalent up the level of five average salaries in the past, and now that cap has been removed. So now people earning more than five times the average salary in Romania have to pay a percentage on their entire earnings, which obviously increases the amount they and their employers pay, and decreases the amount they keep.” According to Dinu, “the business environment has criticized the Government's action, saying it was not even announced as something they were going to do, and then turned out to be among the first things they did.”  

Obviously, Government action is an important subject in Romania. Dinu describes "a bit more nationalistic leaning of the ruling party” in the country, though he notes that "this is not uncommon in the world right now.” He laughs. "So I guess we are slowly gyrating in the same direction as most of the rest of the world.”  

Finally, on the subject of law firm business, Dinu reports that litigation and regulatory practices are active, but says that, in Bucharest, “the rest of practices could be more highly utilized.” He’s not sure why, but he reports that “while we have a decent number of projects, there isn’t an enormous amount of work out there at the moment, and there’s a sense that it should be busier than it is.” Dinu agrees that the Romanian economy itself "has been doing great,” in recent times, "but the legal market is not really keeping pace — I don’t necessarily see much buoyancy in the legal market at the moment. It is a good question whether the protests and the taxation issues discussed above have anything to do with it. ”  

Romanian Knowledge Partner

Maravela & Asociații is an internationally recommended and repeatedly awarded Romanian law firm providing integrated legal, tax advisory and insolvency services in all areas of interest for businesses and public administration. 

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