Local Government and Public Service Reform Initiative
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South East Europe

Romania

Local Government

The 1991 Romanian Constitution, revised in 2003, institutes the three fundamental principles on which the public administration is grounded: decentralization, local autonomy, and the deconcentration of public services (Art. 120). Since 1991, several laws have been adopted in order to apply the principles of public administration. The first Law on Local Elections was adopted in 1991 and modified in 2004.
The first law of public administration was adopted in 1991 (Law No. 69), and it has been abrogated by the 2001 Law of Local Public Administration. Local public authorities are: county councils and the heads of county councils at the county level, and local councils and mayors at the level of municipalities, towns, and communes. Local and county councils are deliberative organs, whereas mayors and the heads of county councils are executive ones. The law also stipulates that there is no relation of subordination between county councils and local councils. Neither is there between the central government and the local governments. With regard to the type of scrutiny for county and local governments' formation, there are two different ways in which local citizens elect their leadership: first, they directly elect the county councillors, the local ones and the mayors; second, the president and vice-presidents of county councils, as well as vice-mayors are indirectly elected, from among the elected councillors, by the county or local councillors, respectively. The Law of Local Public Administration (last modified in July 2006) has also expanded the institution of local referenda, introduced in 2001, giving the citizens the right to dissolve the county and local councils, in addition to the cessation of mayors' mandates. Nevertheless, local elections operate well as vertical accountability mechanisms, and several notoriously corrupt mayors lost their offices.
Prefects and subprefects were politically appointed by the government (Law No. 69/1991 of Local Public Administration) until the summer of 2006, when they became high civil servants (Law No. 188/1999 of Civil Servants modified; Law No. 340/2004 on Prefect's Institution modified). As a result, they now enter into office after taking written and oral exams, and they do not have political mandates like public authorities. These changes were aimed at depoliticizing public administration and at ensuring the continuity of the administrative activity. Law No. 188/1999 has also created the National Agency for Civil Servants, which is now the main decisional institution in the field of civil service and civil servants' management. However, the Law of Civil Servants (last modified in February 2007) has gradually given more powers to county and local public authorities in terms of civil servants' management.
In 2001, the Government Ordinance on establishing and organizing the National Institute for Administration pushed forward the legal framework for educating both elected authorities and public servants for carrying on new tasks at the local level.
In July 2006, the most recent Law of Local Public Finances was adopted, which establishes the principles, the general framework and procedures of public funds' administration and the responsibilities of public institutions. Local public authorities elaborate and approve their own budgets. They establish, control, supervise and collect local taxes and fees, they have the right to establish the level of local taxes and fees, to contract internal and external borrowing, as well as to establish the priorities in terms of approval and deploy of local public expenditures.
In 2006 a new Law on Decentralization has been adopted. Its positive impact is given, mainly, by: the clarification with regard to local revenue resources for the fulfillment of new local tasks; the classification of territorial-administrative units depending on their administrative capacity; the clear delimitation between central, county and local authorities' competencies; and its stipulation that the transfer of competencies shall be made simultaneously with the transfer of financial resources and instruments, and the new competencies shall be exercised only after the necessary financial resources have been given to county and local public authorities.
"The Updated Strategy for the Acceleration of Public Administration Reform" (2004), a document accepted by the representatives of the European Commission, envisages continuation of the public administration decentralization process. The strategy reinforces the transfer of power from the central to local level as a component of the democratic process.

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   South East Europe

Countries
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Romania
Albania
Bosnia and Herzegovina
Bulgaria
Croatia
Kosovo
Macedonia
Montenegro
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Slovenia
South East Europe

1 Government background The principalities of Wallachia and Moldavia - for centuries under the suzerainty of the Turkish Ottoman Empire - secured their autonomy in 1856; they united in 1859 and a few years later adopted the new name of Romania. The country gained recognition of its independence in 1878. In 1940, it allied with the Axis powers and participated in the 1941 German invasion of the USSR. The post-war Soviet occupation led to the formation of a Communist "people's republic" in 1947. The decades-long rule of dictator Nicolae Ceausescu, who took power in 1965, and his Securitate police state became increasingly oppressive and draconian through the 1980s. Ceausescu was overthrown and executed in late 1989. Former Communists dominated the government until 1996, when they were swept from power by a fractious coalition of centrist-right parties. In 2000, the center-left Social Democratic Party (PSD) became Romania's leading party, governing with the support of the Democratic Union of Hungarians in Romania (UDMR). The opposition center-right alliance formed by the National Liberal Party (PNL) and the Democratic Party (PD) scored a surprise victory over the ruling PSD in December 2004 presidential elections. In 2007, a referendum was held in Romania on President Traian Basescu's impeachment based on charges of constitutional violations during his mandate. Although the charges had been rejected by the Constitutional Court, the referendum was held on May 19, and 75% of the active electorate voted in favor of the suspended President. The most recent opinion polls (IMAS, May 2007) indicate that the most popular political party is the pro-presidential one, the Democratic Party (53%), and the most popular politician is Romania's President, Traian Basescu (60%).
Romania has become an EU member state in January 2007.
2 Area Total: 237,500 sq km
Land: 230,340 sq km
Water: 7,160 sq km
3 Geography Romania is situated in South-eastern Europe, bordering the Black Sea. It consists mainly of rolling, fertile plains; hilly in the eastern regions of the middle Danube basin; and major mountain ranges running north and west in the center of the country, which collectively are known as the Carpathians. Romania shares a border with Bulgaria (608) km, Hungary (443 km), Moldova (450 km), Serbia and Montenegro (476 km), Ukraine (north 362 km), Ukraine (east 169 km).
Romania's natural resources are petroleum (reserves declining), timber, natural gas, coal, iron ore, salt, arable land, hydropower.
4 People Population: 21.7 million (March 2004 est.)
Ethnic composition of Romania is 89.5% Romanian, 6.6% Hungarian, 2.5% Roma, 0.3% Ukrainian, 0.3% German, 0.2% Russian, 0.2% Turkish, 0.4% other (2002 census).
The religions practiced in Romania are Eastern Orthodox (including all sub-denominations), Protestant (various denominations including Reformate and Pentecostal), Roman Catholic, Muslim.
The official language is Romanian; other spoken languages are Hungarian and German.
5 Economy GDP Annual Growth: 4.5% (2005), 7.7% (2006), 6% (2007).
Unemployment rate: 5.5% (2005), 5.8% (2006), 4.5% (2007).
Annual inflation rate: 4.01% (2007).
Romania is a country of considerable potential: rich agricultural lands; diverse energy resources (coal, oil, natural gas, hydro, and nuclear); a substantial, if aging, industrial base encompassing almost the full range of manufacturing activities; an educated, well-trained work force; and opportunities for expanded development in tourism on the Black Sea and in the mountains. Since the fall of the Ceausescu regime in 1989, successive governments have sought to build a Western-style market economy. The pace of restructuring has been slow, but by 1994 the legal basis for a market economy was largely in place. Foreign capital investment in Romania has been increasing, but remains significantly less in per capita terms than in most other transition economy countries in East and Central Europe. In 2005, the total amount of foreign direct investment in Romania was of 21,885 million euro.
In November 2001, the government negotiated an 18-month standby agreement with the International monetary Fund (IMF) for a total amount of $431 million. The IMF board approved Romania's completion of the standby agreement in October 2003, Romania's first successfully concluded agreement since the 1989 revolution. Despite delays in privatizing certain companies, the overall balance of the economy has shifted decisively. Even in 2002, the private sector produced about 69% of GDP, accounted for approximately 55% of assets, and employed approximately 55% of the work force. The private sector accounted for 69.1% of Romania's GDP in 2003. By 2004, Romania's private sector employed over 72% of Romania's total work force.
Macroeconomic gains have only recently started to spur creation of a middle class and address Romania's widespread poverty, while corruption and red tape continue to handicap the business environment.
6 Sources CIA Fact Book

The US Department of State

Speech by Dr. Marius Profiroiu, Secretary of State for Public Administration Reform, Ministry of Administration and Interior of Romania, at the Congress of Local and Regional Authorities of Europe (2004)

Freedom House Country Report 2005: Romania

Euractiv, 2007

National Institute of Statistics

Romania's National Bank