Event organized by Social Housing NOW! within the framework of the European Action Coalition for Housing and the City Housing Action Day 2023
In Romania, the cost of energy ranged from 0.10 lei in December 2021 to 0.24 lei in December 2022 to 0.74 lei in January 2023, all figures exclusive of VAT. Because of the spike in energy prices brought on by price liberalization and trading energy on financial markets, which were politically justified as a cost of obtaining independence from Russian gas, businesses have seen increased profits. After delaying the decision for several months, the Romanian government settled on the 'price cap' for gas and electricity in December 2022. This choice meant subsidizing the increased energy price and, in this way, supporting the companies. For instance, under Governmental Ordinance No. 27/2022, a family would now be compelled to pay the energy supplier 745 lei if their gas bill from January 18 to February 20, 2023, showed a usage of 274 cubic meters at the cost of 3290 lei. Who makes up the difference? The state, either from the contributions made by citizens to the public budget or from loans from banks that increase Romanian's public debt.
In addition, rising energy prices have increased the cost of food. Butter increased by 47%, potatoes by 34.93%, oil by 34.35%, eggs by 33.72%, milk by 32.96%, cheese by 30.93%, flour by 30.68%, and bread increased by 25.85% when compared to January 2022. Sugar increased by 63.37%. People's income cannot counterbalance this huge price increase because the national minimum income has only increased by 17.6% and public pensions by 12.5%. Additionally, in reaction to the inflationary wave, the Romanian government decided to boost bank interest rates through the Central Bank of Romania. Reducing the number of new bank loans lowers the purchasing power of people and companies. But most importantly, it significantly raises the monthly repayments for borrowers who already have debts larger than the present debt ceilings, increasing the profit of lending financial institutions.
Due to the aid offered to capital (started during the pandemic), the state increased Romania's public debt from 300 billion lei (in 2017) to over 650 billion lei in October 2022. The subsequent addition of a 4-billion-dollar loan in January 2023 and a 2-billion-euro loan from international markets in February 2023 increased this debt. The Romanian government has also increased the money it spends on militarization over time. The following budget increases are anticipated in this domain for 2023 compared to 2022: Defense Ministry with52%, the Romanian Intelligence Service with 21%, the Foreign Intelligence Service by 17%, the Guard and Protection Service by 13%, and Special Telecommunications Service by 62%.
- The causes and effects of the cost-of-living increase
Although numerous factors influence inflation today, rising incomes are not the primary factor. Restrictions imposed in response to the COVID-19 outbreak and decreased supply were among the contributing factors. In these conditions, businesses with strong market positions could raise prices. A second factor was the EU's political decision to support the geopolitical objectives of the USA by removing Russian gas from the European energy market. Also to blame for inflation is the liberalization of energy prices. The Electricity and Natural Gas Law (Law 123/2012), linked to the privatization of energy companies started in the 1990s in the European Union, served as the impetus for this process in Romania. This has resulted in an exponential increase in food prices. It has also increased the cost of bank loans and public debt, prompting the latter to support capital through subsidies and other forms of assistance. These policies have been proven ineffective, as they do not reduce inflation but instead maintain high prices and exacerbate the current economic downturn. Among these is the supposed market regulation known as "capping," which actually does not regulate the market; contrary, it keeps the prices high and assures the companies' profit.
Furthermore, since signing the NATO agreement in 2015, when it committed to allocating a minimum of 2% of GDP to the Ministry of National Defense's budget beginning in 2017 and maintaining this level for the next ten years, the Romanian government has increased its investments in the militarization of the country. In November 2022, Căși social ACUM! organized a protest to draw attention to these issues with Gastivists and GAS. This was attended by approximately 100 people, which is not much in a city as big as Cluj, but it was acceptable in a town like this, where acknowledging that one does not have enough money to pay for the costs of living here is viewed as extremely embarrassing. Then again, against the backdrop of the Ukrainian war, public opinion was created in a manner that blamed "the Russians" and "the Russian gas" while concealing the root causes of these price increases.
Furthermore, both the economists' definition of the problem and their proposed solution are deceptive. In addition, the middle class of the last 30 years has been constructed to preclude it from criticizing capital and capitalism. Alternative concepts and solutions, such as the excess profit tax, the re-nationalization of energy firms, and the real regulation of markets, are exceedingly difficult to develop under the current circumstances.
Enikő Vincze, Căși sociale ACUM!/ Social Housing NOW! Cluj and Viziunea Socialistă (Socialist Vision) Romania
In order to control inflation, liberal economists recommend decreasing purchasing power, which at the end of the day, endangers employment. They advise us to take this dreadful dose of sacrifice in order to accomplish this goal. But who does such an intervention benefit? We recently saw that the US government recently stepped in to save the bank despite Silicon Valley Bank's lengthy history of lobbying against state intervention in the market. Meanwhile, the average individual has a harder time making ends meet, and fewer people continue to believe that hard work can elevate a person. Many individuals discover that moving to a metropolis does not result in an improvement in their living conditions. Since the crisis in Ukraine, which led to the restriction of oil and gas supply channels, it is abundantly obvious that businesses in the sector have been flush with cash. Last year, PETROM earned the highest revenue of corporate Romania, 10.3 billion RON. And they have already announced that they want to avoid paying the solidarity tax proposed. Exxon gained a profit of USD 56 billion by repurchasing USD 35 billion in shares. Chevron, another fossil fuel company, has announced that it will re-buy shares for $75 billion, sending money directly into the pockets of investors. People in Portugal, Greece, Germany, France, and other countries are beginning to say, "Enough is enough," and are holding strikes and street demonstrations. Profit advocates argue that because these profits are invested in our welfare, they benefit all. Nevertheless, the claim that the rusty gears of this financial system could provide our salvation is no longer plausible.
Radu Ioan Stochiţă, independent journalist and Cartel Alfa trade union activist
Real estate investors utilize our homes as a source of profit. We can see the REDURB research project’s perspective on the housing market and how it impacts us. Investments in international and domestic real estate are in high demand. Large investors with abundant resources seek to put their capital in riskier businesses that are simpler to manage and also attract the interest of others. NEPI, for example, sold its offices in Romania and began the construction of residential real estate; by 2021, it will have €2 billion worth of rental structures, which may not be of tremendous value globally but are without a doubt of a great deal in Romania. Investors focus on middle- and upper-class families who can afford to put down cash or obtain mortgages to purchase expensive homes, making houses a very attractive investment. However, what exactly does it mean to be creditworthy? It entails devoting most of one's life to repaying bank debt, including the interest on which banks profit, and becoming an obedient worker. Even with rising bank interest rates, some buyers can still afford to purchase a home, including those who make purchases as an investment. In recent years, housing prices in Romania have increased considerably, and there is still room for growth in this sector. However, rent arrears are the primary source of household debt in Romania. Some cases are invisible, such as people no longer in debt because they have reduced their consumption or disconnected themselves from heating. On the business side, it is commonly observed that large firms outsource work to smaller companies and that the most severe form of exploitation occurs at the end of this chain, from which the large corporations at the top of the hierarchy appropriate their undetectable profits.
Ioana Florea, Common Front for the Right to Housing and Viziunea Socialistă (Socialist Vision) Romania
We wonder why the manifest toughness of the bills fails to mobilize people against those responsible for this. Alongside this crisis, other new conditions have also emerged, such as the war in Ukraine, about which even journalists cannot write properly because they have been so easily blamed for being "Putinists." Furthermore, to decipher the reply to the above question, the fate of the middle class in Romania must also be understood. We have long observed the effects of the state's withdrawal from economic domains that left a large population in poverty. Today we are watching how this process affects that part of the middle class, which has supported privatization and liberalization. Instead of organizing against the issues truly to blame for their deteriorating lives, a significant portion of the middle class is becoming unstable and leaning rightward. For instance, in the rural secondary schools where I teach, I have witnessed how the state's withdrawal from transport has benefited private companies. The same thing occurs in other fields: where the government withdraws, private businesses flourish, and the vulnerability of those who need specific services but cannot afford to pay for their private sector costs increases. The occurrence of the phenomenon that I call 'class within class’ in schools means that as more educational services are privatized, children from low-income families are less likely to perform well. We cannot anticipate great school performances for children whose parents are experiencing the most severe financial difficulties. With all these issues on the table, there are signs that workers have become extremely mature and are prepared to be part of important changes. We, a small group of intellectuals used to a radical discourse, would be astounded by how articulate and thoroughly radicalized people have become if we encountered them in a furniture factory, construction site, or shopping mall. This is a promising sign, but we should consider that far-right forces may speculate on this.
Costi Rogozanu, journalist and teacher
Picture from the protest Everything is too expensive, November 2022, Cluj
- The lived experiences of cost-of-living crisis in everyday life
My family and I reside on Cantonului Street in Pata Rat, the landfill area of Cluj. Many of us have worked for sanitation companies for a long time; until recently, we worked for Brantner-Veres and Rosal, both of which recently lost the city hall-organized bid for sanitation services, with Supercom emerging as the sole winner. I would call it Mayor Boc's Super-Shit-Com, which exploits its monopoly status. Because neither the new employees nor the transferees from the previous corporations—individuals with 10–12 years of experience—could perform their duties anymore as they should. In this case, I'm not just referring to those who perform physical street cleaning or litter collection labor but also to some administrative personnel. The company's management deceives individuals and engages in unethical practices. It relocates employees from their usual city sectors; when this happens, they face unknown situations and make errors. As a result, dissatisfied residents lodge complaints, and management threatens to fire the employees. People are also threatened if they disagree with a new policy or are dissatisfied with anything, and I'm not even talking about salaries here. Employees of Supercom cannot afford to lose their jobs because there is no other sanitation company in the city. People must now pay the higher cost of electricity with the same salaries as before, which was barely above the minimum wage, together with the compensation for night and weekend shifts. Or to pay for the increased price of food, as what once lasted two weeks for 500 lei now lasts only five days. Despite being assured they would, staff members have not yet received the promised food coupons for the end of March. The street sweepers have not received their food vouchers in eight months. People are discussing that they should seek employment elsewhere, as they are disillusioned with their new employers. But where should they go towards? It is especially difficult for individuals with only eight grades because they have hardly any job alternatives. They all desire to leave this company but have no other choice. They must tolerate being trampled because they cannot afford to lose their livelihoods. But if mockery and contempt continue for months, people may lose their forbearance. Moreover, poverty will endure substantially longer.
Maria Stoica, activist Social Housing NOW!, Cluj
We recently purchased a property with some friends in Petrinzel, a village 40 kilometers from Cluj. This is also because living in the city is very expensive, even if it would be impractical to reside permanently in this village due to mobility issues. However, one needs to consider similar alternative strategies to avoid bank loans for an apartment in the city. We have also looked to safeguard the environment. Urban horticulture was the focus of our ten-year exploration of sustainable development models in Cluj. I approached the issues this way because I am an architect familiar with the city and can witness its flawed development. In addition to constructing houses from natural materials, we are developing educational programs for horticulture. This semi-exiting from the metropolis is our answer to Cluj's severe housing crisis, which also affects social categories that are not impoverished, pay their bills and rent on time, but still perceive that there is something problematic about this city. Despite this, why did we continue to stay in Cluj? Because unlike other localities in the region, it hosts events like this one, which, a few years ago, all were face-to-face meetings and opportunities for exciting debates. In principle, as an architect, I could choose to design the housing units that are typically sold in Cluj for 2,500 euros per square meter, but in reality, I am not even asked to work on such projects, as they require a specific type of architect who is in high demand. I continue to have architectural projects in the city, but they are increasingly on the periphery and have scarcely any space left in Cluj. This is partly due to the high prices and intense competition for design, construction, and sales per square meter.
Silviu Medeşan, architect and professor at the University of Oradea
Numerous autonomous cultural workers in Cluj are losing their workspaces due to the recent increase in utility costs and the decade-long trend of rising private rental costs. There are signs that these categories are becoming more aware of the negative effects of gentrification or driving more and more residents out of a city because of profit-driven urban development. The Social Housing NOW! movement believes that these unfavorable circumstances create the potential for political solidarity among those facing various types of evictions, from the poorest homeless, through independent cultural workers to the wealthier individuals who may lose their homes due to unpaid bank loans.
Căși Sociale ACUM!/ Social Housing NOW!
- Actions against the cost-of-living crisis
We are a global organization striving to eliminate the effects of the fossil fuel industry and promote the need for truly green energy initiatives. When discussing gas, the current climate catastrophe must be considered. We assert that we do not want gas at all, that the reduction of gas consumption is insufficient, and that we oppose replacing gas with dubious alternatives, such as hydrogen, developed by the same industry that caused the climate crisis. Since the EU began turning elsewhere for gas, we have said "no" to new sources of exploitation and "no" to all gas, emphasizing that we cannot achieve energy independence with more gas. Since the beginning of the conflict in Ukraine, the "no more gas" narrative has been interpreted as being on Russia's side. Governments and corporations do not want the fossil gas industry to fail. Governments only communicate with advocates for the gas industry, with the big companies’ lobbyists. Corporations also impose legislation in this domain; they determine measures that are best for their interests. We know the gas industry is an essential pillar of the current crisis. We live in capitalism, so the need for Europe to switch from Russian gas to gas from elsewhere has been speculatively priced at extremely high levels, and fossil gas companies have gained the benefits of substantial investments. Europe has sufficient natural gas for the upcoming winters to comply with climate requirements. Existing gas and LNG supplies could have been used this winter and possibly next if the industry had been willing to gradually reduce production rather than increase it. But if we do not immediately invest in alternative and renewable energy, this reduction will continue to be delayed. If profit is prioritized over people, the proposed solutions are false leads that cost people more money.
Let us now recall some recent anti-gas actions. In July 2022, a protest message against exploiting Black Sea gas in the perimeter of Neptun Deep was projected onto the Romgaz building in Mediaş. Before the Ukraine conflict, OMV Petrom and the American company Exxon Mobile initiated this venture; however, in 2021, Exxon Mobile withdrew because it believed the project would not be profitable and sold its shares to Romgaz. Recent arguments against Russian natural gas restated the urgency of the investment and tried to re-justify this exploitation. In this circumstance, Gastivists advocated for a just transition and renewable energy while expressing solidarity with the workers. With the occasion of another action, organized in November 2022 in collaboration with the Cluj-based Social Housing NOW! movement, we witnessed how mainstream social media attempted to disqualify us by asserting that those who oppose the cost-of-living increase are pro-Putin. We are told that the price rise was acceptable because it was caused by Russia, that we are all in the same boat and must make sacrifices and practice self-imposed austerity, and that we should adopt the logic of gas corporations, according to which we do not have to want Russian gas but must want gas from elsewhere. Finally, it is essential to recall the March 2023 protest in Vienna that led to a boycott of the European Gas Industry Conference. Over three days, approximately 1000 demonstrators shut down streets, occupied conference entrances and private jet airports and shut down the OMW refinery. These actions demonstrate the public's anger about the fossil fuel industry's influence over political decisions. I will conclude by conveying my desire to see a similar attitude and enthusiasm against gas exploitation in Neptun Deep as in Vienna.
Ani Mărincean, Gastivists
In Britain, one of the centers of global capitalism, the high cost of living and raging inflation have created the conditions for a surge of strikes, beginning with the rail transport industry in the summer of 2022. Similar strategies have been employed by other unions, involving fire fighters, employees of airports, highway constructions, postal offices, border guards' units, and school education with higher education included. The Labor Party, founded by the trade unions in 1900, no longer supports the strikes. However, the railway employees have received 14% and the fire fighters 12% wage increases, and they enjoy widespread support. Nevertheless, like in higher education, most other trade unions are on hold. Despite historically being a more privileged category of employees, 44% of teaching personnel and 68% of research employees are now employed on temporary contracts, so they are precarious even in extremely wealthy universities. Even though the unions are willing to concede this conflict, they face democratic pressure from their radicalized members. I am also part of this effort, and we hope that the main labor unions will leave the Labor Party and form a new political organization that will represent the interests of the working class. If it comes to Romania, there may be no union members in Romania who are radicalized and radicalized laborers might be outside the unions. In this circumstance, organizing precarious and unrepresented employees at the grassroots would be necessary. I believe that trade unions could not establish a new party in Romania, but I do not think that trade unions could be avoided by the attempt to initiate a new political party representing the workers' interests.
Vladimir Borţun, Grupul de Acțiune Socialistă (Socialist Action Group) and ViziuneaSocialistă (Socialist Vision) Romania
While the real estate, banking, and fossil fuel industries have enormously profited from the cost-of-living crisis, people's opposition against them increased. On the one hand, since 2020, the European Action Coalition for the Right to Housing and the City has organized a series of actions in several cities under the umbrella of Housing Action Days. This year, at the end of March, the event turned into a week-long action of marches, protests, neighborhood barbecues, workshops, and seminars across the continent. Throughout the past three years, Căși Sociale ACUM!/ Social Housing NOW! has organized events in Cluj to raise awareness about the subordination of urban development to profit making and the absence of public housing to solve the housing crisis.
On the other hand, climate change and anti-fossil fuel activist groups are intensifying their campaigns against corporate aggression against society, as exemplified by excessive profit growth and escalating environmental degradation. This militancy, on both sides, inspires initiatives to combine the forces of housing rights and climate change activists. During a workshop conducted in Brussels at the end of February, I participated in such discussions with representatives of various climate groups. The meeting concluded that the rising cost of living, including the cost of housing and fuels required for transportation and heating, is bringing our demands closer together. While there are numerous organized or spontaneous social movements in Western Europe, such as the general strikes prompted by the increase in the retirement age in France, we must also note the opposite, i.e., the appalling silence on this issue in Eastern Europe.
George Iulian Zamfir, Căși sociale ACUM!/ Social Housing NOW! Cluj and Viziunea Socialistă (Socialist Vision) Romania
Banner on Elisabeta bridge across Someș river from Cluj-Napoca, March 2023