A MYSTERIOUS MEETING What did Wolfgang Schäuble and Mugur Isărescu talk about?

The Finance Minister tucked her head between her shoulders and did not utter as much as a whimper anymore, after the article "Schäuble la Ministerul finanţelor, ca Iglesias Jr. la Antena3" (Schäuble at the Ministry of Finance, just like Iglesias Jr. at Antena3) (BURSA/28.10.2016), as she was completely lost in the web of contradictory statements, that she has made, together with Raiffeisen Bank and GlobalCapital (an Euromoney magazine), which sought to deny the sponsorship by Raiffeisen Bank of the Conference organized in Bucharest, on October 26th, with the participation of the German finance minister Wolfgang Schäuble, of prime-minister Dacian Cioloş and of Romanian finance minister Anca Dragu.

Why they were so anxious to deny that the Conference was sponsored by Raiffeisen Bank?

Why did they deny that, even though the banners on display showed that Raiffeisen Bank was the sponsor?

Why did they deny it, even though they have announced on the microphone that Raiffeisen Bank was the sponsor of the Conference?

Why did they deny it, even though they have projected on the screen installed at the conference that Raiffeisen was the sponsor of the Conference?

Why?!

What could be so dangerous in the fact that a bank was sponsoring a conference?

Normally, there wouldn't be anything serious about it, it is customary and it is perfectly legal.

The answer to these questions is unpleasant enough, as it is not clear whether German finance minister Wolfgang Schäuble trip to Romania was sponsored by Raiffeisen Bank or not, in an action which I can't tell whether it was lobby or influence peddling. Because Raiffeisen Bank has threatened the Romanian state, through public statements, with bringing a lawsuit against it with the international courts, because the government has passed the Law of giving in payment, putting pressure on the National Bank of Romania and the government.

The pressure from the Austrian bank was enough for the reckless Anca Dragu, who serves as finance minister in the Cioloş cabinet, to get ahead of herself, saying that she wouldn't even send in lawyers to defend the State, if it were to be sued, because it would lose anyway (I think that the lady's statement is simply illegal - I was under the impression that there was a law which requires the authorities to defend the State whenever it is attacked, including in court, and I think that the minister actually took an oath to do so, when she was appointed).

The reaction of the National Bank of Romania (NBR), that came from Daniel Dăianu, member on the Board of Directors of the NBR (see the BURSA September 21st, 2016 issue), was a bit wiser:

"What I want to tell you is that banks are wrong in threatening to sue the Romanian state, even when doing so in a veiled manner; I am referring here to the intention of some banks to take the litigation arising from the law of giving in payment to the international courts. [...]

And you can't boil everything down to a lawsuit following a narrow-minded commercial logic, either.

I hope that the banks which have such plans will give them up, because, if in a certain scenario they were to win, they would lose on other levels and those losses would be significant.

Such a lawsuit would probably fuel the hostility towards foreign banks [author's note - emphasis mine] that operate in Romania (even though the NBR calls them entities with Romanian legal personality), and towards foreigners.

Political discourse will be envenomed. Together with other events that have been happening lately, Romania that so far hasn't been taken over by the wave of a nationalism colliding with the European project may enter a new, dynamic stage."

This text displays a daring, normal attitude, (rather than the cowardly, irresponsible one of the Finance minister) in response to the threat, and we can assume that it covers a gap between the central bank and some of the commercial banks, which was not visible when the entire banking system joined forces to fight the passing of the Law of Giving in payment and against the militant banking clientele.

Raiffeisen Bank holds the most important position among the banks acting in a threatening manner. Through its chairman, Dutch Steven van Groningen, it holds the presidency of the Council of Banking Professional Associations in Romania, is a member of the Council of Foreign Investors and has held the leading position of the so-called Coalition for the Development of Romania (where he continues to be represented) - a rather ironic title, if we were to evaluate his "contribution" to the development of the Romanian capital market (which doesn't go beyond the notorious "Eight barriers" document - a kind of exercise in futility, whose promotion did not bring to any improvement of the activity on the stock market, which would come as no surprise for any normal person that went through it).

Well, Daniel Dăianu's aloofness is in fact the extension of a parting of ways that happened in the beginning of 2016 (see Interview with DANIEL DĂIANU:"Companies in the Coalition for Romania's development should concern themselves with other issues besides their strictly financial interests"/BURSA/ 01.02.2016/Adina ARDELEANU).

But the hostility of the public towards foreign banks, which Dăianu recently warned about (after I did so myself repeatedly, in BURSA, earlier), is an idea that has made its way even in Wolfgang Schäuble's speech, in last week's conference: "It is important to avoid a discussion about the conflict between foreign and Romanian investors" [author's note: emphasis mine].

This shows that the German finance minister is aware of the delicate situation, created by the threat that Raiffeisen Bank bank made against the Romanian government and that he finds the time to be concerned about it, even though it is not part of his job description.

Because of that, the clarification of the role that Raiffeisen Bank had in Wolfgang Schäuble's trip to the Conference in Bucharest, where Raiffeisen Bank was introduced as a sponsor becomes very important (it bears mentioning here, that the Romanian Foreign Affairs Ministry refused to clarify the nature of this visit by the German minister - official, working or state visit -, and the Finance Ministry did not comment on that aspect).

The organizer that wasn't mentioned anywhere in the documents distributed to the public - GlobalCapital, a magazine of the Euromoney group - informed us that Raiffeisen Bank sponsored a "round table" in Bucharest, but said that Wolfgang Schäuble did not attend it.

Besides, on the website of the German finance ministry, "the round table" wasn't even included in Schäuble's schedule, only the Conference was.

It seems however, that Wolfgang Schäuble has attended a "table" after the meeting, after the Conference.

We don't know whether the table was round or rectangular, but we do know that NBR governor Mugur Isărescu met minister Wolfgang Schäuble, at a dinner hosted at the Lac Villa (a meeting which wasn't mentioned in the German minister's schedule either).

That is all we know, we haven't found out what the talks between Mugur Isărescu and Wolfgang Schäuble were about.

On the other hand, we can make assumptions, based on what we already know and based on what has happened afterwards.

On the next day, in the morning, governor Mugur Isărescu held a speech at the "Banking Compliance Summit" Conference, organized by the Romanian Banking Institute (IBR), where, among other things, he said:

"In this context, we also have to understand the importance of public behavior. And in that regard, I am once again going to ask you to put an end to arrogance in the public discourse, in your relations with your customers. This is not the first time that that issue is discussed. My advice would be to drop any kind of arrogance, for the sake of a permanent dialogue with your customers and society, and that essential aspect concerns ethical standards. It is true that sometimes, one can appear arrogant when being a professional and using a technical, "mumbo jumbo" vocabulary. But even so, you, as bankers, have to show goodwill - benevolentia - towards your customers and public" [author's note -- emphasis mine].

I note that the discourse is aimed mainly at bankers and I note that even though bankers are overwhelmingly Romanians, banks are overwhelmingly controlled by foreign capital.

Isărescu is urging the representatives of foreign capital to goodwill towards our public, and thus implicitly sends them the message that they need to have a different approach in the conflict with their domestic clientele.

On the same day, from Raiffeisen Bank Viena, via Raiffeisen Bank România, we received clarifications on the sponsorship, worded as follows:

"Global Capital will also publish an issue about Romania and about the event, in November, and Raiffeisen Bank International, headquartered in Vienna, is the only sponsor of the publication, wishing to emphasize the commitment for Central and Eastern Europe, in general, and for Romania in particular" [author's note: emphasis mine].

Sounds absurd.

Raiffeisen Bank wants to emphasize its commitment to Romania, but it threatens Romania with bringing a lawsuit against it in an international court.

Benevolentia!

Hypocrisy works when it is concealed, but contempt has increased so high, that the hypocrisy is now overt.

It is possible that Isărescu and Schäuble talked at the "Lac" Villa, about the Raiffeisen Bank case.

In the absence of information on what they talked about, we can infer anything, for instance that, in fact, a negotiation will have taken place, where the German offered the price of blocking the lawsuit by Raiffeisen in the international courts, against the freezing of the action to investigate the legality of Steven van Groningen's actions as a person and as a banker.

That is of course, if such an investigation, (which has been rumored) were to take place.

Bid and ask.

Otherwise, like the editorial by Cornel Codiţă published last week said: What was the German doing in ... Romania?

Schäuble himself felt the need to explain the reason for his visit, because apparently he didn't have any serious reason and has therefore said, in the beginning of his speech, at the Conference, that he came over here because it was a beautiful day.

Everybody knows how prone Germans are to do things "on a whim".

They can't wait to come to Romania when the weather is fine.

Look at that, Romanian synonyms for "whim" come from German: chef, fandoseală, fiţă, maimuţăreală, moft, naz, poftă, prosteală, sclifoseală, toană, pârţag, fasoleală, hachiţă, izmeneală, pandalie, marghiolie, nacafa, năbădaie, toancă, zâmbâc, paraxenie, bâzdâc, farafastâc, marafet, boală, dambla.

Well, they are from German, except when they aren't.