Crisis In Romania: Constitutional Court Votes Pension Cuts Unconstitutional, IMF Loan In Jeopardy, Presidential Palace Stormed, CDS Blows Out

Tyler Durden's picture

Several days after the Romanian parliament passed a law to cut pensions by 15% in order to qualify for a critical $20 billion IMF loan, the Romanian Supreme Court found this law was not only unconstitutional, but unappealable (along the lines of what our own SCOTUS will do once the Fed's transparency appeal gets to the very top, resulting in confirmation once and for all that American laws are only made for the benefit of the Federal Reserve). The decision was reached hours after dozens of Romanian citizens stormed the presidential palace "to get an audience with President Traian Basescu." As a result of the Constitutional Court's decision, the IMF loan "may now be delayed, and this will be a big blow to the government
of Prime Minister Emil Boc, the BBC's Nick Thorpe reports." Also as a result, Romanian (and by association, neighboring Bulgaria) CDS blew up today and closed +30 to 410 for Dracula's host country, and +20 to 360 bps for the country that served as the reverse engineering center of the former Communist Bloc.

From BBC:

A top court in Romania has ruled out a pension cut demanded by the country's government as part of a deficit-cutting financial austerity measure.

The government wanted to cut state pensions by 15%, as well as slashing wages and welfare allowances.

But the Constitutional Court said the pension cut was unconstitutional, a ruling which cannot be appealed.

Romania wants to cut spending to qualify for a $20bn loan from the International Monetary Fund.

That may now be delayed, and this will be a big blow to the government of Prime Minister Emil Boc, the BBC's Nick Thorpe reports.

The court decision came after dozens of people tried to force their way into the presidential palace to get an audience with President Traian Basescu.

Riot police repelled them from the palace.

The court did not publish its reasoning behind the ruling, but unions say pensions partly funded by worker contributions to are protected by the constitution.

Just wait until Greeks get wind of this ruling, and ask the logical question why their own constitution allows their pensions to be cut by as much as 30%. So much for the smooth and glitch-free passage of austerity across all of Europe. Oh, and it is about time, as we have long been claiming, that investors take a long hard look at Eastern European CDS. It is still not too late.

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DoChenRollingBearing's picture

News keeps getting worse every week.

Time to run and hide!

Perseid.Rocks's picture

> Romania wants to cut spending to qualify for a $20bn loan from the International Monetary Fund.

What happens when people realize the countries providing the IMF with their funds are essentially bankrupt. I suppose that'll never happen right ? After all we make our money by electronic entries in a ledger, and also by hiding the truth from the public, while the rest of the world has to borrow their money, or actually earn it.

MADinMelbourne's picture

"we make our money by electronic entries in a ledger"??? THAT'S the problem... we look at a plastic screen, see digits and THINK IT'S MONEY!

AccreditedEYE's picture

Risk off, risk off!! The storm moves West..

Dr. No's picture

They are so lucky, they actually have pension rights written into their constitution!!  Makes pursuit of happiness seem kind of ho-hum. (yeah, I know its our declaration that wrote it.. but still).

Ragnarok's picture

Legislated Happiness! Hooray!

Zina's picture

Poor humanity. It's able to go to the Moon. Able to build CERN and the LHC. Able to build the Hubble telescope. Able to build the "Deep Blue" computer. Able to build robotized factories wich produces hundreds of vehicles by day with a staff of only 20 or 30 workers. But unable to guarantee decent pensions for all it's seniors... Poor humanity... I hope we reach 2012 soon...

Duncan's picture

But of that list, only the pension is a mathematically guaranteed to fail Ponzi scheme.

Zina's picture


We, the young people, can produce thousands of cars by day in a robotized factory with a staff of only 20 workers. We have the tecnology to build Hubble, LHC and go to the Moon. But we can't pay decent pensions to the elders who hard worked the whole life... I see...

Poor, poor humanity...

Ragnarok's picture

Why don't "we, the young people" just take care of our own parents.  If the parents did a good job raising their children they should be able to provide.  Babyboomers can go fuck themselves.

michaelduff's picture

Beat me to it. I was going to say flying to the Moon is mathematically possible.

7bit's picture

It is also mathematically possible with our technology to produce enough for all people without all people needing to work for it. Thats why we invented these robots and all the technology in the first place.

DosZap's picture


 "But unable to guarantee decent pensions for all it's seniors"

They could have, if they were not thieves(stole the paid in dues)..............the day of reckoning approaches..............the pounds of flesh will be extracted,from those who thought themselves TBTF.

Vendetta's picture

Its like legislating patriotism with patriot acts!  Hooray!

DosZap's picture


No, there not lucky, when the merry go round stops, and there's no MONEY for their pensions.............WHO will have won?.

Not them.


Also, "the Pursuit of happiness"- was not in the original Constitution, it "READ PURSUIT OF "PROPERTY".

Rusty_Shackleford's picture

I know.


Why not include the right to be free from all human want in your Constitution?


Go for broke.

DosZap's picture


You must not be American, as you sorely lack understanding of the interpretaion.

It guarantees a PURSUIT of, not a RIGHT to have.

Meaning you , YOU.............must suceed,no freebies....just a shot, a chance, and it's up to you to either MAKE it, or NOT.

Rusty_Shackleford's picture

It was sarcasm dos.  A reductio ad absurdum gag.   I forgot the </sarcasm> tag.

I understand the Constitution just fine.

kurt_cagle's picture

No, the pursuit of happiness was not in the Constitution - it was in the Declaration of Independence:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights,that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.


This was truly incendiary at the time - and even today government goes out of its way to deny the true import of this particular paragraph.

AnAnonymous's picture

They are so lucky, they actually have pension rights written into their constitution!! 


They may or may have not pension rights written in their constitution.

More likely, they have stuff related to contract respect (as it is one of the two hallmarks of another stuff that many people boast about, therefore quite easy to remember)

A unilateral decision over pension funds contract might be therefore unconstitutional as it contravenes the contract respect stuff.

The most interesting in this biz is of course people reacting to this and failing to see the possible contract breach.

Once again, it tells on what people truly expect.

Ragnarok's picture

Deflation isn't an option when you are litterally forced to print (at least they still can) by your own people.  Sadly, the people will be the ones to suffer as they soon realize yu can't squeez blood from a stone.

Mako's picture

"Deflation isn't an option"

Who said you have an option?  It's like saying death isn't an option. 

You have choices but the ultimate results has already been determine from the choices already made.

Let me see, everyone picks a system that eventually forms a black hole by it's nature, then someone claims going into the black hole after you enter the event horizon is not an option.  Good luck with all that, I assure you the black hole will suck you down.

A good portion of the population is going to have to go.   I know how this going to play out, how do I know, is it because I am smart, heck no, it's the same thing that has been happening for 1000s of years.

"The matrix is older than you know. I prefer counting from the emergence of one integral anomaly to the emergence of the next, in which case this is the sixth version." - The Architect

"Denial is the most predictable of all human responses. But, rest assured, this will be the sixth time we have destroyed it, and we have become exceedingly efficient at it." -The Architect

The Lemmings are in "denial", how do I know, well the system would collapse this second if they were not.  Eventually the Truth is going to smack the denial right out the Lemmings skulls whether they think it's an option or not.

Dr. No's picture

I respect the possibility of deflation. However, when the fed gets backed into a corner, what assest does the FED not have the ability to monitize?  They already monitized mortgages.  Next if could be car loans, credit card debt, you name it.  In this light, I see deflation as a low risk (here in the US at least).

A Man without Qualities's picture

This is exactly the sort of ruling that leads to hyperinflation.  I expect something similar will be the trigger that tips the US down this road... 

Cheeky Bastard's picture

Americans are such goddamn pussies its incredible. Italy, France, Romania, Greece, Germany and soon to be followed by all other European nations are rioting, burning and fighting for their "rights"; and what do Americans do; they bitch and moan and buy iPads. Europe. For.The.Win.

Bolweevil's picture

Grumpy, grumpy. Please consider changing your comment by inserting "most" before Americans.

Cheeky Bastard's picture

No, what I said is correct. I dont see anyone storming Congress or NY-FED or any other federal buildings. All I see is AAPL going to 300, Twillight fans camping infront of multiplexes and idiots camping outside AAPL stores. Nuff said. If you wanna junk me, junk me; its not like I give a shit; what I said is true.

Ragnarok's picture

Out of curiosity, what kind of domestic security forces are there in Europe (like the National Guard) that the gov't could use to impose its will on the citizens?  Insurection with an insecure President with a lot of force at hand could be very dangerous.


BTW, any one looking for ammo or gun accessories check this site out, it is the traelocity/expedia/craig's list of ammo deals.


FourWude's picture

Ragnarok is kind of right.

Do you really think the past decades build up of a security/police state was just to keep a few terrorists (without any real means to enter) out??

The whole system was designed to be internalised.

Cheeky Bastard's picture

Europe is not a country, so I really cant answer is there a heavy "security" state mechanism in place for the entire continent. Individual countries do have "special" forces to combat any social unrest [mostly intervention and special police] but nothing even as close as the US does. The US "domestic security" apparatus would put USSR [during Stalin years] to shame. Governments try to "tame" the populace down, but not a year went by in the last, oh, 2000 years or so, that there has not been a revolt, revolution or war in Europe. Americas self perceived "exceptionality" is anything but; its a moronic imperial belief fed to Americans.

This is the last I'm going to say on this topic; we have debated this many times over in the past year and a half, and  most know where I stand on this [not that it really matters]. Im not going to lose my nerves and my IQ points debating with someone [not you Ragnarok; you're cool, but idiots are in majority] who only read G. Washington, D. MacArthur and FDR biographies and thinks of himself knowledgeable. Fuck that; its been a hard day today plus its a Friday; I have better things to do than to debate America vs. Rest of The World.

hamurobby's picture

Let the government stop handing out checks and then you will see some riots.

Careless Whisper's picture

@ cheeky

does this count for anything?

union workers let loose rats in city council chambers to protest layoffs - yonkers, ny



RichardENixon's picture

I saw with my own eyes Washington D.C. torched in 1968, Los Angeles torched in 1992, and New Orleans in the process of being torched in 2005. In each case it took a massive military response to restore order. And I mean MASSIVE. Americans are like a big amiable tiger who's been raised by humans to be nice and passive and civilized and then one day decides he doesn't like the way the trainer looked at him and rips him to pieces.

Cheeky Bastard's picture

Agree; 68 was more correlated with Vietnam and it got a boost from European occurences in [browse the Internet for a bit and search 1968; one of the most significant years for Europe in 20th Century]. The sad thing is; when Americans do revolt [which is rare] they revolt ex post facto; when the damage has already been done and nothing can be changed. 

Nihilarian's picture

Listen, you Bastard, you are correct on all counts. Americanism, as you describe it, is a state of mind that enslaves the very people who believe in it. Breaking the state of mind of Americans is is like taking trying to explain to someone why their religious beliefs are absurd. Now, Mr. Bastard, I go stream Netflix to my iPhone 4.0

I need more asshats's picture

We can't help it Cheeky. So many people are on anti-depressants here in the US. They have fowled the water supply with their urine which is full of anti-depressants. Every water based consumption activity medicates each and every American to the point of being so peaceful and calm.

Have a beautiful day dude.

Vendetta's picture

True.  However, the medication is barely keeping them from killing someone despite the megadoses.

neophyte's picture

CB, you are right. The truth always hurts. Just see what is happening around us, perhaps that is why AAPL is @300, Twilight fans camping in front of multiplexes  and no one is storming the Congress. WHatever happened to that creed of Americans who stood against tyranny, stood for freedom, liberty and justice and had the balls to walk up to washington to end the Vietnam war. It brings to mind this Poem by an Indian Poet.

Rabindranath Tagore

User Rating:

9.1 /10
(24 votes)

- vote - 1 2 3 4 5 6 7 8 9 10

  Print friendly version   E-mail this poem to e friend   Send this poem as eCard   Add this poem to MyPoemList   Where the mind is without fear and the head is held high
Where knowledge is free
Where the world has not been broken up into fragments
By narrow domestic walls
Where words come out from the depth of truth
Where tireless striving stretches its arms towards perfection
Where the clear stream of reason has not lost its way
Into the dreary desert sand of dead habit
Where the mind is led forward by thee
Into ever-widening thought and action
Into that heaven of freedom, my Father, let my country awake


spinone's picture

The protests and riots in America just arent televised, Cheeky.  The media is state/corporate controlled here.  Believe me, we have them.

Bolweevil's picture

Junking is for pussies and trolls. (t-shirt?)

I'm not sure what its going to take to get people out of apple stores maybe its the TV's, medicated water, too comfy, weed, a sense that voting works, Hopey McChange, our collective cattle-ness? Bread and gladiators works like a motherfucker. But, I fear we will find out. I am interested to see how Americans respond when the first rock gets thrown. I don't disagree with you, I also don't think absolutes pertain well to this subject. I hope you are well.  

rmsnickers's picture

Junking is for pussies and trolls. (t-shirt?)

+1 Awesome!

The Mighty Monarch's picture

Big difference between Europe and the U.S., at least for now:

We give our kids an abundance of false hope in this country. It won't last much longer. My parents believe that they actually own their property as opposed to renting it from the government via property taxes. They don't quite grasp that their generation will be the last to benefit from the Ponzi scheme of SS/Medicare. They don't understand that their generous government pensions and worry-free medical care are gotten at my expense as well as their grandchildren's. Any financial windfall is greeted with "What can we buy with this?" as opposed to "Thank God, we can put this into savings in case trouble strikes." They hold out hope that the illusion will continue for my family.

I will not be making these same mistakes with my children. They will inherit from me a distrust of centralized government. They will learn the lessons of survival, of self-reliance, and frugal, simple living. They will learn the old adage of "Use it up, wear it out, make it do, do without." And they will certainly learn how to operate and maintain my firearms.

FrankIvy's picture

I bow to you.  You write what I've thought many times.  My parents are, sadyly, perfect representatives of their generation - clueless, brainwashed, close minded.  They did receive a 6 figure inheritance at one point after my father lost half their retirement savings in the tech crash.  So what did they do with it?  Not sure, other than I noticed the trips to the great Loser Magnet in Nevada became more frequent.

It took me almost 4 decades to extricate myself from the consumption culture into which I was born.  Thank God I was able to see where I was.

When did I start disliking the culture of my youth?

I'm not sure.  I'll think on it.

The Mighty Monarch's picture

Admittedly I'm still extracting myself from the consumption culture. Not an easy's so wired into our brains that it's almost like an involuntary muscle reaction. We're certainly more frugal these days seeing as both myself and the wife are out of work, but it's going to take some willpower not to immediately begin the vacation plans the moment I'm employed.

I'm just worried about my folks. Although they have a nice piece of land, they're still significantly mortgaged and in their mid-sixties. The idea that they should be debt-free in retirement just seems alien to them. In a similar situation my first instinct would be to get the hell out of debt in case the pension goes away (and they're retired California state employees so it's certainly a possibility).

Don't blame you about the culture of our generation. We're talking about a generation raised by a generation that never had to deal with real hardship or an all-consuming world war. What defines "necessity" now is asinine. We churn out thousands from mostly useless colleges that teach no viable skills but engender a misplaced sense of accomplishment and entitlement.

Personally, I feel weakened by three and a half decades of soft suburban living, where I never learned how to grow or hunt for food, or build much of anything. I'm slowly correcting this but I feel like I have years of catch-up learning to do. God help anyone else of my generation that doesn't start preparing now.



DoChenRollingBearing's picture

I have already told my new worker-bee kid that the future looks grim.

If/when she gets married soonish, that couple is going to get a LOT of interesting, useful and valuable gifts.

She already is the best shot in the family...