Research regarding the draft Law on the approval of the [609587]

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Research regarding the draft Law on the approval of the
Government Emergency Ordinance no. 100/2018 –
sovereign development and investments funds

1. Executive Summary
The economic sector is about to be given support due to a new legislative project of the PSD
governance, the Sovereign Development and Investments Fund. Accessible for small enterprises, start –
ups, entrepreneurs, this fund promises to offer financial support in areas as infrastructure development,
technological innovation, and creating a relia ble and sustainable framework for providing long -term job
opportunities.
This fund will consist of state -owned companies, especially their dividends, shares, etc. which will be
under the control of the Government. Since this fund is creating with a focus o n firms and enterprises that
are at the beginning of their lifetime, its success, as well as impartial and equal accessibility for any legal
entity, has to be one of the top priorities of the governing parties. Otherwise, any action of interfering will
be subject to the approval process in Parliament. This process has to be managed carefully and must
balance short -term achievable goals with long -term considerations.

2. Introduction to the legislative process in the
Parliament
The Romanian Parliament’s legisla tive process is strict and it has to follow certain steps when it
comes to draft law/legislative projects. This process involves several actors, the Parliament along with its
Committees; numerous opinion s that must be obtained, The President of Romania , etc. The process
through which any legislative project goes to become enacted law is the following:
1. The Permanent Bureau of the notified Chamber
 From here the legisl ative project is required to obtain the following:
 The opinion of the Legislative Council (in 15 days )
 The opinion of the Government (in 15 days )
 The opinion of the Competition Council, Court of Auditors, the Supreme
Magistracy Council – it depends on the type of legislative project – (in 15 days )
 After obtaining all the above, the project is sen t to the substance Commission , which
will analyze the draft law to see if it meets the substantive conditions and then forward
the project to the specialized Commission , which is appointed by the Permanent
Burea u, to receive its advisory opinion ( in 30 day s)
 After obtaining the opinion, the project is sent back to the Permanent Bureau of the
notified Chamber

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2. The project is included on the agenda and it has to follow the next process:
 The plenary debate – it consists of:
 General debate of the legislative pro ject
 Debate on articles (if in the rapport of the substance Commission are any
accepted or rejected amendments)
 Voting the draft law
 If the draft law did not pass the voting phase it will be sent back to the
Permanent Bureau of the notified Chamber
 If the draft law did pass the voting phase it will be sent to the Permanent Bureau
of the decision -making Chamber
 This process through which the legislative project goes, from the Permanent
Bureau of the notified Chamber to the Permanent Bureau of the deci sion-
making Chamber , cannot be longer than 45 calendar days (standard)
3. The Permanent Bureau of the decision -making Chamber sends the draft law to:
 The substance Commission – it analyzes the draft law to see if it meets the substantive
conditions ( in no more than 60 days )
 The draft law is sent by the substance Commission to the specialized Commission ,
appointed by the Permanent Bureau, which will analyze the draft law to see if it meets the
substantive conditions
 The substance Commission has to give its a dvisory opinion in 30 day s, and, after all of
the above, the legislative project is sent back to the Permanent Bureau of the decision –
making Chamber
4. From the Permanent Bureau of the decision -making Chamber the draft law is sent to be
subject to the plenary debate:
 General debate of the legislative project
 Debate on articles (if in the rapport of the substance Commission are any accepted or
rejected amendments)
5. After passing the voting phase, the draft law is forwarded to the President of Romania , who has
the following options:
 To ask for the reexamination of the draft law ( only once ) – in this case , the legislative
project is sent back to the Permanent Bureau of the notified Chamber (in 30 days )
 To enact the draft law ( in 20 days ) – in this case , the draft l aw is published in the
Official Monitor
To refer the Constitutional Court to start the process of verifying the constitutionality of the draft
law – in this situation the Constitutional Court analyzes the draft law and has to give its opinion;
if the opinion is positive , the draft law is sent back to the President for promulgation ( in 10
days ); if the opinion is negative , the legislative project is sent back to its initiator for correction

3. The legislative project
For increasing its budget in the development sector, the PSD -ALDE government wishes to create a
sovereign fund that will consist of profitable state -owned companies. For financing this fund, the
government will have access to the company’s dividends; will be able to sell shares of these companies,
to issue bonds , etc.

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 The importance of the project
This legislative project is very relevant for the economic sector, because it represents a great
opportunity for small firms, young entrepreneurs who have the intention of creating start -ups, and
enterprises, in particular, from the industrial field to enjoy financial supp ort with the ultimate purpose of
attracting non -refundable funds, to develop their businesses on a long term period, and to offer to the
market new jobs in order to reduce the unemployment rates at the national level.
The main focused areas of this legisla tive project are represented by the following: massive
investments in industrial development, due to the lack of technological innovation ; investments in
infrastructure projects; financial stimulation for start -ups and enterprises which are at an early sta ge of
development; jobs creation in a sustainable way, with geographical priority in rural areas and economic
priority in urban areas; increasing the economic competitiveness on the Romanian market; long -term
human and social capital development etc.
After presenting all of the above, we can clearly see that this legislative project at its core has
great importance for the development of the economic sector, focusing more on reducing discrepancies
between rural and urban areas and offering a significant amo unt of financial support for the industrial
sector, as well as start -ups and enterprises in an early stage of development.

 The changes which it will bring
The legislative project regarding the creation of the sovereign fund for development and
investments brings a considerable chance for the potential of Romania’s economic growth. The main
change is represented by the Fund itself, due to the method of financing it. As presented above, the fund
will consist of dividends; company shares , etc. and it will be control led by the government to financially
support small enterprises and start -ups.
Another change in the economic sector represented by this legislative project is the creation, for
the first time, of a public mechanism through whic h the segment of private activities or infrastructure
projects will have additional financial support besides Bank loans. Many companies have reliable
projects, but since they are indebted and cannot obtain other loans, these projects end up only on the
whiteboard.
 The impact
Such an initiative is salutary for the economic sector, but , still, the impact which it will have can be
both positive and negative:
 Positive impact:
The creation of additional financial support for start -ups and small enterprises in s everal
fields, but with spe cial interest in fields such as: infrastructure development, industry,

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technological innovation . Through financing these entities, the government pursuits the
ultimate goals of providing investments in infrastructure projects; fi nancial stimulation for
start-ups and enterprises which are at an early stage of development; jobs creation in a
sustainable way, with geographical priority in rural areas and economic priority in urban
areas; increasing the economic competitiveness on the Romanian market etc.

 Negative impact:
Taking into consideration the fact that this fund is going to be managed by the government
and it will be financed by state -owned companies, those two aspect s alone might generate
concerns regarding the credibility and capability of the government to manage this sovereign
fund and skepticism regarding the degree trust and long -term profitability of the component
state-owned companies of the fund, in the eyes of potential external investors. Today it is
difficult to find state -owned companies with a very good track record, due to the lack of
coherence in the government policies, and long -term investors will not be attracted to invest
in a company based only on pr omises.

 Who will be affected?
If this legislative project will end up being successful, a considerable part of the society will be
affected , in a positive way, by the impact which this fund will have. Due to preliminary research the
following categories which will be affected have been identified:
Legal entities :
 Small enterprises
 Entrepreneurs
 Start -ups
 Companies operating in fields such as industry, technology innovation, infrastructure
development
Different categories of citizens
 Citizens who are located in rural areas, where job opportunities are limited and
unemployment rates are very high
 Citizens who are located in urban areas, where is generous space for economic growth and
innovation

4. Preliminary mapping of stakeholders

Governmental
 Ministry of Finance
 Ministry of Tourism
 Ministry of Transport
 Ministry of Economy

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 Prime -minister’s Office

Political
 The l eadership of governing coalition parties

List of other stakeholders
 The National Association of E ntrepreneurs
 Start -up Nation
 The Pro -Infrastructure Association
 City Halls
 Banks

5. The intervention strategy
Any form of intervention, to generate a “win -win” situation for all stakeholders, will be treated, in the
end, as a draft law in the Parliament and will have to follow a very str ict and defined process to be
enacted.
Short -term: 3 months
1. Defining the client’s profile and running extensive research of mapping other stakeholders with
similar profiles
a) Define the client’s profile, compare it to the eligibility criteria for accessing funds, and
decide on what aspects interventions are required
b) Conclude a comprehensive list of stakeholders (which match the client’s profile) to be
addressed join/invite/engage all
2. Build a coalition of informed supporters and specialist
3. Elaboration of the draft law and submit it to the Parliament
Medium -term: 5 months
4. Participation at the plenary debates regarding the client’s draft law
5. Supporting and justifying the necessity of the respective regulations which the draft law will bring
 Ensuring the draft la w will pass the plenary debates as well as the voting phases with
success