Darius Vâlcov — The Architect of Fiscal Chaos
For those following the debacle at the heart of the Romanian justice system it might seem that the governing coalition of the PSD and its smaller partners in crime have pulled out all the stops to save party grandees and cronies alike. You would think they would stop at nothing, irrespective of the risk of throwing the country into disarray and hurting the common man. You would, of course, be correct. But the true tragedy of the PSD coalition is that the justice laws are not even the most immediately damaging of the government “reforms” nor the most outwardly ridiculous. That dubious honor belongs to the architect of the “fiscal revolution” and the untold chaos it has sparked in the Romanian fiscal system. And the author of the “fiscal revolution”, and, in fact, of the entire governing program, is none other than Darius Vâlcov, former small-town mayor, current big-shot strategist and, most likely, future convict.
Darius Bogdan Vâlcov was born in Slatina, the town he would later run as mayor. After studying mathematics in high-school, he opted for a career in economics. Active in the banking sector for a while, Vâlcov went searching for where the true money lies in Romania, local government. Running as a PD candidate (party which he had been a member of since 2000) during Traian Băsescu’s “Orange Revolution” Vâlcov became mayor of his hometown of Slatina, which he continued to run for two terms on the Democratic Liberal (PD-L) ticket until 2012. Vâlcov abruptly changed parties in 2012 and went across the aisle to the Social Democrats, retaking his mayor’s seat on a PSD ticket that year. Months later, he found himself (at the tender age of 35) on the PSD lists for the Sente. He won, kick-starting his rise from local figure to central party strategist.
Because this is what Vâlcov’s role is today. Liviu Dragnea, the indisputable leader of the Social Democrats, once described Darius Vâlcov as “a man of rare value, economically speaking”. To a certain extent Vâlcov earned his academic stripes or seems to have done so. As a businessman with two college degrees, he also had a PhD in economics. So Vâlcov was offered the demanding job of Delegate-Minister for Budget affairs in the 2014 Ponta government, a job of which he acquitted himself honorably, so honorably in fact as to have survived the downfall of Ponta and his associates. When Liviu Dragnea carried the day for PSD at the 2016 elections, he put Vâlcov in charge of the governing program as well as the vetting of the cabinet. “He, along with myself and two others were the architects of the governing program, which has to be followed.” Dragnea would later say of Vâlcov.
Said governing program, the all-encompassing program for the PSD’s four year term, proved to be a roaring disaster. Not only did it overestimate revenues, as the PSD planned a series of tax breaks and expenditure expansions, but it had at its core a complete fiscal reform, the so-called “fiscal revolution”. By shifting the entire tax burden to the employee, similar in some ways to the US system, rather than the eclectic but tried and true balance of taxes paid by employers and employees, the PSD hoped to simplify the payment process for employees and the self-employed alike.
The result was an unmitigated disaster. While the overall implications are still unclear, there are tens of thousands of employees, many of whom in the public sector who, despites assurances that their pay will rise or, at the very least stay the same, ended up losing money. Parental leave pay went down. Many in the private sector found their wages cut by shady employers who did not shift the fiscal burden to the employees, opting to ditch it (or pay it “in an envelope”) instead. Part time employees found themselves having to pay more taxes than their total income, literally having to pay for their work, instead of getting paid. The entire affair was, and still is, a complete disaster that nobody knows how to undo.
Meanwhile, Vâlcov, the architect of the fiscal revolution had problems of his own: his past had finally caught up with him. Just as the first measures were coming into effect, the Romanian High Court of Justice slapped the former Slatina mayor with a whopping eight year prison sentence for corruption, bribes and incompatibility charges. Apparently, while still a humble country mayor, it was not uncommon for Vâlcov to demand 20% of the estimated cost of public works in his little fief from those who won the contracts. These added up over time to some stupendous sums, the state having to recover 6.2 million lei, or €1.33 million. While the decision is not final and can be appealed, such a stiff sentence from one of the highest courts in the land bodes ill for the “brains” behind the fiscal revolution. One thing is certain: while many Romanians are right now unsure of what they will receive with the next paycheck thanks to Vâlcov’s “genius”, the master strategist will hopefully get exactly what he deserves.
