Nicolae Văcăroiu (; born 5 December 1943) is a Romanian politician, member of the Social Democratic Party (PSD), who served as Prime Minister between 1992 and 1996. Before the 1989 Revolution, he worked at the Committee for State Planning, together with Theodor Stolojan. He was the President of the Senate of Romania for almost eight years, during two legislatures (2000–2004 and 2004–2008).
Political activity On November 20, 1992, he was appointed to the role of Prime Minister of Romania. His prime ministerial mandate began with some limited economic reforms in the areas of fiscal, budgetary, monetary, and industrial prices, which made possible the resumption of Romania's economic growth starting in 1993. Between 1993 and 1996, the GDP grew by 17.5%, after a contraction of 24.5% in 1990-1992 immediately after the fall of the communist regime. After a drop in industrial production of 49% between 1990 and 1992, there was an increase of 22% in the 1993-1996 period. However, this growth was not sustainable, with many enterprises remaining under the weak management of the state, and produced much in stock just to report rising production figures. At the same time, foreign investment was almost non-existent, as the government opposed any significant privatization in industry, although at that time many enterprises could still be sold at reasonable prices. These delays caused Romania to enter into recession at the end of Văcăroiu's tenure as well as Bulgaria. Instead, Văcăroiu opted for an inefficient privatization method: the distribution of some enterprises to the general population, with the option of subscribing to some state-owned companies, but without providing any real and relevant information on the economic situation of those enterprises. At the end of his term, the situation of most state-owned enterprises was disastrous, even in Bancorex (a foreign trade bank with a prospect of success), which made Romania close to unable to pay its debts.
Internationally, as regards the prospect of accession to the European Union, on 1 February 1993 the European Association Agreement with the European Community, which entered into force on 1 February 1995, was signed, and in June 1995 it obtained the agreement of all the forces policy on the objective of the country's accession to the European Union. Also, the first request for NATO membership was made. As far as relations with neighbors are concerned, the settlement of bilateral treaties has been delayed. As Yugoslavia was under international embargo because of its actions in Croatia and Bosnia, relations with it were frozen. Moldova and Ukraine accused Romania of irredentism, among other things because the coalition that supported Văcăroiu's cabinet included nationalist and conservative-communist forces (the Romanian National Unity Party, the Greater Romania Party, and the Socialist Party of Labour) and because it insisted that the bilateral treaties referring to the 1939 Molotov–Ribbentrop Pact, which had led to territorial losses for Romania to the Soviet Union, from which Ukraine and Moldova had inherited their borders (those tensions diminished after Văcăroiu's and Oliviu Gherman's visits to Chișinău and Kyiv in the first half of 1995). Hungary, for its part, negotiated a basic treaty, but Romania refused to accept the inclusion in this treaty of a commitment to comply with Council of Europe's Recommendation 1201 on Minorities. The Treaty with Hungary was signed in September 1996, and in May 1996 the treaty with Yugoslavia could be signed after the Dayton Agreement and the lifting of the embargo on that country.
Following the suspension of President Traian Băsescu by the Parliament of Romania on 19 April 2007, Nicolae Văcăroiu became the interim president of Romania after the Constitutional Court of Romania acknowledged the vote of the Parliament, until the impeachment referendum results were announced on 23 May 2007. During his interim presidency, Văcăroiu, according to the Constitution of Romania had all the prerogatives of a president, minus three of them: he could not dissolve the Parliament, he could not address the Parliament, nor organize a public referendum.
On 14 October 2008, he was voted by the Parliament as President of the Court of Audit.
Professional activity
Văcăroiu obtained a bachelor's degree in economic studies from the Bucharest Academy of Economic Studies, Faculty of Credit and Finance (1964–1969).
In 1969, after graduation, he was employed as a trainee economist at the State Planning Committee (C.P.S.), where he underwent all hierarchical stages from the position of economist to the director of the Finance Department. Coordinated financial, monetary and price activities, conducted tracking, control and reporting, analyzed and prepared annual proposals on performance indicators for state-owned productive enterprises, and participated on the drafting of the quarterly credit plans and cashflow charts, as well as drafting of normative acts in the respective fields. Deputy Minister within the National Ministry of Economy (established through C.S.P.’s reorganization). In 1990, he participated in the implementation of normative acts adopted by the Provisional Council of the National Union. He was part of the team, which, under the coordination of academician Tudorel Postolache, elaborated the "Romanian Reform Strategy" to ensure the transition to democracy and the market economy. State Secretary within the Ministry of Finance. Văcăroiu served as Head of the Prices Department position from which he coordinated the process of elaborating the strategy of gradual liberalization of prices in the Romanian economy. He participated in drafting laws on price liberalization. Subsequently, he was appointed Head of the Tax and Tax Department, coordinating the tax reform process in order to harmonize with European Union legislation, preparing the introduction of VAT instead of the tax on the movement of goods. Also in this position started preparations for the introduction of the global tax for individuals. In 1992 he was Chairman of the Interministerial Committee of Guarantees and Foreign Trade Credits. Prime Minister within the Romanian Government. In November 1992, Văcăroiu was appointed Prime Minister of Romania, without being a member of any political party, at the proposal of the Party of Social Democracy of Romania (P.D.S.R.), a public office he exercised until December 1996. The main objectives of the Governance Program were: economic recovery and rebuilding the macroeconomic stability, undertaking the necessary reforms in all areas of activity in order to ensure their competitiveness and efficiency, ensuring stability and social balance, preparing for accession into European and Euro-Atlantic structures.A. Internally, during the period 1993–1996, as a result of the economic reforms in the field of prices, fiscal-budget, monetary and industrial, it was possible to resume Romania's economic growth as follows: Romania's Gross domestic product (GDP) had increased by 17.4%, recovering by 71% of the economic decline from 1990 to 1992, when the GDP had decreased in real terms by 24.5%; The industrial production has increased (since 1993) by 21.7%, recovering 40.2% of the decline registered at the end of 1992 (54%). The entire production increase was due to the increase in labor productivity by 52.8%. Industrial production has been marketed through: increase in exports from $3.4 billion in 1992 to $4.2 billion in 1993 and $6.5 billion in 1996; increasing the investment rate from 19.2% of GDP in 1992 to 23.0% of GDP in 1996; increase in the population's consumption through measures undertaken to restore purchasing power. The average general government deficit in the period 1993-1996 was -2.2% of GDP compared to the one in 1992 of -4.6% of GDP; In order to significantly mitigate the inflation while accelerating the reforms, a mix of measures related to financial, monetary and price policies were required, as it follows: the shock liberalization of prices whilst eliminating subsidies for products and services for the population since the 1st of May 1993; the scope of the products and services whose prices were under supervision decreased from 112 positions to just 24 positions; the number of imported products for the household consumption (bread, pork and poultry, dairy products, etc.); some public services (urban passenger transport, rail transport, postal and communications services, etc.); natural and organizational monopolies (electricity and heat, natural gas); some subsidized products (human medicines, minerals); the shock liberalization of prices led to an increase in inflation from 195.5% in 1992 to 295.5% in 1993. Effects: reducing the general government deficit from - 4.6% of GDP in 1992 at -0.4% of GDP in 1993; the current account deficit of the balance of payments decreased from 8% of GDP in 1992 to 4.5% of GDP in 1993; the inflation decreased from 295.5% in 1993 to 61.7% in 1994 and 27.8% in 1995; the introduction since the 1-st of July 1993 of the value added tax which replaced the old tax on the movement of goods. An 18% quota was set except for: 9% VAT on products of strict necessity in the consumption of the population (bread, milk, meat, etc.), press and publications; VAT rate 0 (zero) with right to deduct on the heat supplied to the population; reduction of the profit tax rate from 45% to 38% and in agriculture to 25%; 50% reduction of the tax on the profit from exports and the one used for technological modernization; the system of customs duties has been revised by aligning it with the one applied in the Member States of the European Union; gradual reduction of the production subsidies; the excises’ system has been modified either by increasing it or setting it up for some import products that were not strictly necessary, with favorable effects of mitigating the country's commercial and currency deficit; the application of measures leading to mitigation of the quasi-fiscal deficit from an average of 16.5% of the GDP over the 1990-1992 period to an average of 6.5% of the GDP over the 1993-1996 period; budget's decentralization and strengthening the competences of local authorities in the field of taxation; over the entire period, more than 8 billion lei were granted from the state budget for the establishment and development of small and medium-sized enterprises (lending credits with bearing interest - 50% of the National Bank of Romania ‹NBR› reference interest rate); the establishment of the Romanian Loan Guarantee Fund for Small and Medium-Sized Enterprises (with the participation of the state budget). By the end of 1996 there were 526,563 commercial companies with private capital - especially small and medium-sized ones, out of which 47,294 were trading companies with foreign participation; Concurrently with the application of the prices’ shock liberalization and the abolition of subsidies in 1993; salaries, pensions and social allowances were increased by 3.1 times, covering the inflation rate of 295.5%. Basically, the purchasing power of the population has been restored. Subsequently, a periodical indexation (usually on quarterly basis) of pensions, wages and social allowances with the consumer price index was applied. In 1993, the guarantee of payment of the gross minimum wage was introduced, obligatory for all economic agents, regardless of the form of ownership. In 1995 it was exempt from income tax. In the field of sectoral and privatization policies, it is worth mentioning: 86 Restructuring and Development Strategies were developed aiming at a 2025 horizon, out of which 55 were industry strategies;