BY THE LOGIC OF VICTOR PONTA Remus Vulpescu - "the head and the life" of minister Chiţoiu

Remus Vulpescu, the head of the Office for the State's Interests and Industrial Privatization (OPSPI), has sacrificed himself on the altar of the failed privatization of Oltchim, by handing in his resignation, even though it is unknown what he did wrong. The only thing we could pin on him would be listening to the song "Au înnebunit salcâmii" (The acacias have gone crazy", by Romanian singer Tudor Gheorghe). Honestly, we can understand his going insane, given the show put on by journalist Dan Diaconescu during the privatization.

Prime Minister Victor Ponta told the minister of the Economy, Daniel Chiţoiu, on the launch of the call for tenders, that he would answer "with his head, with his life and his everything" for achieving the privatization of Oltchim, asking him to get directly involved in the process.

Meanwhile, the prime minister changed his mind, following the scandal created by Dan Diaconescu, who participated in the call for tenders for Oltchim and won it. Perhaps following the pressure he was subjected to, Remus Vulpescu resigned from the position of chairman of the OPSPI and apologized for the failure of the privatization of the plant of Vâlcea, since it was obvious that "the people" need a scapegoat, especially as far as the media is concerned.

In the press release in which he announced his resignation, Remus Vulpescu said: "The call for tenders was organized without any violation of any legal provisions and was intended to encourage the participation of Romanian or foreign investors which, in cooperation with the government, would ensure the turnaround of Oltchim and provide the urgent solution to the social issues generated by the company having been pushed into bankruptcy by its management over the last years. The intention of Dan Diaconescu to hijack the privatization of Oltchim through defrauding the public and use of forgery, in order to gain notoriety and perhaps for other purposes which will be determined by the authorities, could not have been predicted and could not be officially acknowledged prior to Monday, October 1st, 2012, which is also when the criminal actions of Diaconescu were stopped".

Victor Ponta initially said that Remus Vulpescu needs to talk less and to explain more. After the announcement of the cancellation of the call for tenders, the head of the Executive concluded that the sale of the plant must be resumed next year, through negotiations with a strategic investors, saying: "I think that Mr. Vulpescu doesn't want to continue to deal with the privatization of Oltchim and we do not, either".

When asked insistently by the members of the press whether he would dismiss the head of the OPSPI, Victor Ponta said: "Mr. Chiţoiu, Antena 3 wants the head of Vulpescu. Tell the press what you plan to do with him because he is your subordinate". And we don't know what minister Chiţoiu did, but Vulpescu resigned.

Even though the call for tenders for Oltchim was the most transparent in history, the press wasn't any kinder to Remus Vulpescu, nicknaming him the DJ of the Ministry of the Economy, for playing music to Dan Diaconescu during the negotiations. But the transparency of the privatization of the press was requested by the press and by Dan Diaconescu. Remus Vulpescu accepted the idea and asked the participants in the call for tenders to agree to the presence of the press. All the investors agreed to the proposal and they have even appreciated the transparency of the procedure (including Dan Diaconescu).

Everybody liked that transparency: TV stations, because it caused their ratings to go through the roof due to the scandalmongering Diaconescu; the government - because everybody could see that the procedures were complied with, that Diaconescu just keeps talking rubbish and that he didn't have the money he promised he had, contradicting himself from one day to the next; Remus Vulpescu, himself, because he could more easily defend himself against the attacks of Diaconescu (Vulpescu was accused of having tampered with the envelopes and that he told Ponta how much each bid was worth, but Dan Diaconescu signed and acknowledged live on TV, the minutes which stated that the envelopes with the bids were intact).

The truth is that neither Daniel Chiţoiu nor Remus Vulpescu can't be "executed" for the failure of the privatization of Oltchim. The privatization method (the sale of the stock without conversion of the debts into equity, whereas the receivables of the AVAS and of Electrica would be sold in separate calls for tenders) was approved by the government led by Victor Ponta.

A postponement of the privatization of Oltchim past the month of September was impossible due to the pressure of the commitment made to the IMF, which threatened that it would not release the next tranche of the loan if the Government did not sell the plant.

According to many economic analysts, the success of the privatization of Oltchim depends on the conversion of the plant's debts into receivables into debt. Or, for various reasons, the debts of the plant weren't converted into equity by neither the USL government or by the PDL. Minister Daniel Chiţoiu said that he could not conduct the conversion prior to the privatization due to minority shareholder PCC.

In order to conduct the conversion, is necessary the vote of the shareholders which hold 2/3 of the share capital of Oltchim. Or the government only holds 54.8%, and PCC (together with Nachbar, with whom it is acting in concert) holds almost 33% of the shares. Without the agreement of the PCC, no important decisions concerning the activity of Oltchim can be made. The huge debts of the plant and the issues concerning the conversion have caused many lawyers to say that insolvency is the only solution to help restructure the activity of the plant.

Many analysts and politicians have criticized the OPSPI for allowing Dan Diaconescu to participate in the privatization of Oltchim. But, since 2007, the European legislation no longer allows the authorities to set requirements for participating in calls for tenders (in the tender books or through the participation guarantee), which would restrict the participation of interested investors. Neither is setting post-privatization conditions (such as preserving the line of business and preserving the number of jobs, only requiring a specific investment pace). In other words, individuals can participate just fine in all of our important privatizations.

Remus Vulpescu was blamed for allowing Dan Diaconescu to turn the privatization into a full-on circus act, and that he wasn't sober enough in the relationship with the journalist. In fact truth is that Mr. Vulpescu did a very good job of dealing with Dan Diaconescu. The journalists who monitored the issue day by day actually asked themselves what the secret of the psychological strength of Mr. Vulpescu was, considering that it was more than once they were one step from getting into a fight with their "peer" Diaconescu: when asking for the proof that he had the money to pay for the shares of Oltchim, he would invariably answer that he would pay the outstanding salaries of the employees of the plant, and he would act annoyed that people thought him some kind of miser, doubting his wealth.

The authorities were unable to get rid of Dan Diaconescu prior to the 10-day deadline for the privatization contract. Thus, the heads of the OPSPI were unable to have him arrested for false statements (the journalist filed some "surreal" documents allegedly proving the availability of the 45 million Euros needed to pay for the shares of Oltchim). From the moment the journalist entered the competition for the privatization of Oltchim, the government was aware that they were caught in the show of Dan Diaconescu and they had a lot of trouble dealing with the situation.

The privatization of Oltchim was a success for Dan Diaconescu: his political party is skyrocketing in the polls for the parliamentary elections, all for a measly 130,000 Euros - the collateral he paid to participate in the call for tenders and to acquire the tender book. The journalist runs the risk of going to jail for a long time for false statements and harming Oltchim, but he still comes out a winner, because his fans consider him a victim of the "robber barons" of the USL.

The government breathes a sigh of relief for honoring the task it was given by the IMF: he has showed the political willingness to privatize the plant, which now owes over 700 million Euros. The government and the opposition can now argue till they are blue in the face, each one passing the buck for Oltchim and blaming each other for having "leeched" the plant with the help of the ever present Constantin Roibu.

The government is trying to act tough, by auditing Oltchim, so they can take to jail those who bankrupted the plant.

The big losers out of all this are Oltchim (which is close to collapse), the state budget and all of us who need to pay bigger taxes to plug the "black holes" in the economy.