The Fall of Romanian Communism. PART II: Austerity Measures, Protests, and Violent Regime Change
Mihai Dragnea is an Associate Researcher at the University of South-Eastern Norway. In Part II of his article, Dragnea provides an overview of Romania’s tri-part economic transition. He suggests that under Ceaușescu, Romania transitioned rapidly from a predominantly agricultural economy into an industrial economy. This economic progress was, however, only temporary as Romania faced a sovereign debt crisis following the 1979 energy crisis and entered into a severe recession. As the economic crisis worsened in the 1980s, the Romanian opposition overcame its fear of regime reprisals and grew in force. In December of 1989, nation-wide protests culminated in the arrest and execution of Ceaușescu and his wife Elena.
From Social Welfare to Misery
Industrialisation was a main priority in Romania during the 1970s and 1980s. By contrast, communist states in Central Europe had attempted to balance individual consumption and industrialization carefully.
Not only Romania, but also Bulgaria and Yugoslavia had higher growth rates than Central European states. This could be explained by their massive investments in Western technologies and the ability to mobilise a large labour force from rural to urban areas. It is thus no surprise that industrial production in recent decades grew proportionally faster than in any other European country.
Between 1950 and 1968 Romania’s industrial production index grew by over 545 points, compared to 378 in Spain and 362 in Greece. The level of industrialisation was much more akin to that of East Germany and Czechoslovakia than to Mediterranean nations such as Spain, Greece, and Portugal and Czechoslovakia.
After 1968, the important developments in Romania (factories, modernisation of ports and roads, the Cernavodă Nuclear Power Plan, etc.) were made with Western money and in certain situations through industrial espionage. Ceaușescu’s anti-Soviet foreign policy after the invasion of Czechoslovakia and the recognition of West Germany laid the foundation for Romania's ties with NATO and the European Economic Community (ECC).
Political ties with the United States during the Nixon presidency also facilitated Western technology transfer in a wide range of local industries such as IT, automobiles, aircraft, rail, shipbuilding, chemicals, and special steels.
On 9th December 1972, Romania became a member of several Western economic bodies, (International Monetary Fund and the World Bank) which was regarded as an extraordinary development for a member state of the Warsaw Pact. After joining the two economic bodies, on 28th July 1975, the US Congress granted the status of most-favoured-nation to Romania (later withdrawn on 26th February 1988), and Ceaușescu was able to secure large foreign loans.
The decision to apply for funding was made by Ceaușescu and his closest advisers without consulting the responsible committee. Despite the National-Stalinist and “sultanist” features of the regime, especially after 1981, Ceaușescu adopted the liberalisation of trade and investment relations with developed capitalist states.
Ceaușescu’s Romania made a quick transition from a primarily agricultural economy to an industrial economy. Among other benefits, rapid economic growth until the early 1980s had positive social effects. This gave the regime not only legitimacy, but also confidence that a bright future lay ahead of Romania.
The main outcome of these developments was social modernisation through industrialisation, urbanisation, secularisation, equality for education, infrastructure, etc. During the interwar period, the two main social issues that plagued Romania were infant mortality and low literacy among the rural population.
Both were fixed as part of the modernisation process initiated by the authorities. For example, infant mortality in interwar Romania was the highest in Europe at that time (139 in 1,000 live births). This fell to significantly lower levels in the 1970s (35 in 1,000).
In a similar manner, compulsory comprehensive education for all citizens increased the level of literacy, especially among the rural population. Education at the kindergarten level was free, and the population gained wider access to cultural venues of all types. Tourism, libraries, bookstores, cinemas, and theatres were made widely available and affordable for all citizens.
The differences between salaries were not high. Minimum wages were set well above subsistence levels, and until the 1980s the consumer market was diverse. For example, in the early 1980s the average monthly salary was 2,000 lei, reaching about 3,000 lei in 1989. Between 1970 and 1989, the official exchange rate of the Romanian National Bank varied between 6 and 4.7 lei for one US dollar. On the black market, however, the dollar exchange rate was 100 lei, meaning a pack of Western cigarettes (Kent or Marlboro).
In Bucharest the prices varied according to quality as follows: a large ice cream (4 lei), a profiterole (20 lei), a fruit salad (17.50 lei), a regular cake (10 lei), access to the pool at a luxury hotel (25 lei) and a modest one (10 lei), a bottle of Pepsi (6 lei), one kg of chicken meat (20 lei), a train ticket to Constanța — a major city on the seaside about 220 km east of the capital (80 lei), a train ticket to Sinaia — a well-known mountain resort about 140 km north of the capital (33 lei), one ticket for Maxi Taxi/marshrutka (5 lei), a Scrabble game for children (99.50 lei), a leather tie (150 lei), a colour TV (13.000–14.000 lei), a car manufactured by Dacia (70,000 lei), and a Lada 1200 cost (120,000 lei).
The rise in prices in February 1982 particularly affected the food industry and local transport networks. The price of a loaf of bread jumped from 3 lei to 3.25 lei. Similar price hikes followed for taxi rides (3.50/5 lei), a large pretzel (0.80/1 lei), bus tickets (1.25/1.75 lei), trolley tickets (1/1.50 lei), and tram tickets (0.65/1 lei).
It is believed that throughout history, high international debt and domestic austerity policies coincided with the change of political regimes through popular uprisings. Following the shift in the United States’ economic policy in 1979, the era of cheap development finance was over especially in Europe. Romania was affected by the second oil shock of 1979 as well as the Islamic revolution in Iran, which cancelled Ceaușescu’s oil deals with the Shah.
Later agreements were not as advantageous as those that preceded them. For example, in the late 1980s, the Brașov Tractor Works (Uzina Tractorul Brașov) was selling tractors to Iran for $4,000 apiece in order to pay for imported Iranian oil. Indeed, Iraq replaced Iran as the main oil supplier but Saddam Hussein’s war with Iran meant decreasing oil sales to Romania and this affected the industry. As a consequence, between 1976 and 1981, Romania’s foreign debt grew from $0.5 billion (3 % of GDP) to $10.4 billion (28 % of GDP and 30 % of exports).
Regardless, industrial investments continued to flow. At the same time, all more or less significant imports had to be cut drastically and the value of exports had to be increased. Some austerity measures had to be applied later, reversing two decades of social progress. This caused a collapse in living standards.
Around June–July 1982 the currency crisis was in full swing, which pushed the government to initiate the rationalisation of electricity for private households, as well as the reduction of street lighting. Taking into consideration the fact that Romania produced more electricity than Spain or Italy at the time, these developments seemed rather ironic.
In the 1980s, Ceaușescu faced a sovereign debt crisis, which he tried to resolve in a relatively short timeframe by paying off external debts. As a result, Romania entered an economic recession, and the population suffered a major social crisis. One consequence was the decrease of production in the food industry, the decrease of electricity and heat supply, and the lack of hygienic and medical supplies.
Due to the export-oriented nature of the clothing and footwear industries, these industries and similar sectors suffered drastic cuts. Since medical imports were banned in the late 1980s, it was difficult to find even essential products like insulin, single-use syringes, and cotton pads. To illustrate the gravity of the situation, annual public spending on health and social welfare assistance at the time amounted to only one third of the construction costs for a single coal power plant (Centrala Termoelectrica Anina).
From 1981 to 1989, the supply of food staples and production of consumer goods was cut in half. Part of the produced food was sent for export. For instance, in Poland, the authorities cut consumption by 10 % in 1981, but two years later this was restored to pre-crisis levels.
By contrast, in Romania many products were rationed and could only be purchased with ration cards, including petrol (20 litres per month). Holding currency was prohibited. Traffic was restricted and private vehicles were only allowed to drive on some days of the week depending on whether their licence plate ended with an even or odd number.
What displeased the common people was that certain categories of people were privileged. The nomenklatura had access to protocol houses and could procure food from closed circuit networks. Moreover, unlike ordinary citizens, the nomenklatura could go on vacation abroad and have access to the country's foreign currency accounts.
In theory, the regime attempted to rally the population around the idea of national solidarity, because the repayment of debt should not have been solved by a loan from “neo-imperialist” organisations, seeing as this could affect Romania's sovereignty and independence. The inability to pay off the debt in record time was compared to the loss of national sovereignty and was used to indicate ideological defeat.
To stay in power, Stalinist regimes around the world understood that they had to offer social welfare and mobilise nationalist sentiment among the regular population. In the case of Romania of 1989, neither criterion was met.
In practice, Ceaușescu decided to pay off foreign debt through a mix of austerity measures, import substitution of various products, and export-led accumulation of dollar reserves. These measures proved to be effective, and all foreign debt was paid off in full by the spring of 1989, over the span of only a few years.
On 12th April 1989, in a plenary of the Party, Ceaușescu made public that Romania had liquidated its foreign debt and even had debts to recover (12 billion dollars; today 31.4 billion dollars). Unlike Romania, other states affected by the debt crisis of the early 1980s successfully requested debt rescheduling. Ceaușescu also pointed to a fake budget surplus of 8.2 % and exports of $10 billion at the time.
The moment of the revolution of December 1989 found Romania not only in a social crisis, but also in an economic collapse. To this day, Romania has not managed to recover even half of its foreign debt. As a document of the Romanian Ministry of Finance shows, on December 31, 2019, Romania's receivables from various foreign trade activities, carried out before December 31, 1989, were $716.2 million on the convertible currency ratio and 1.522 billion transferable roubles on the rouble ratio transferable and other amounts in various currencies.
Opposition and Regime Response
Political opposition during communism in Romania was very weak and not well-organised for mass mobilisation. At the same time, the communist leadership was not hesitant to use large-scale repression against any attempted mobilisation of the social classes who emerged as opposition forces.
However, it was obvious that key members from the nomenklatura, police, army, and State Security would refuse to express their support for the regime once a mobilised public protested on the streets.
The effects of the social crisis were most strongly felt by the working class in the second half of the 1970s. Most of their actions were not real protests against the regime but strikes. The first major revolts of the working class took place in 1977.
Between August 1–3, the miners of the Jiu Valley revolted due to the extremely difficult conditions in which they had to work underground, the prohibition of accumulating their salary with their disability pension, as well as the retirement age having been raised from 50 to 52 years.
On 10th March 1979, just over one year before the “Solidarity” trade union was created in Poland, the Free Trade Union of Romanian Workers (SLOMR) was established. The members led by Ionel Cană were immediately arrested and investigated. Vasile Paraschiv, an influential member, was forcibly admitted to a psychiatric hospital.
A small strike of the working class carried out in response to the social crisis was recorded on 19th October 1981. At that time, the miners of Motru emphasised the difficult working conditions and the lack of proper food. The protest was stopped within hours after an intervention was made by public authorities. The wages of the working class were slashed, particularly as a result of subsidies for industrial development and the repayment of foreign debt. These cuts became particularly apparent during the last years of the communist regime.
On 16th February 1987, the Nicolina workers in Iași broke the windows of the plant and kidnapped its director, due to the unjustified delay in the payment of wages. The revolt was ended in three hours after the authorities paid the outstanding salaries. A day later, on the evening of the 17th of February, hundreds of students from Iași took to the streets, marching to the headquarters of the County Party Committee. The protest started spontaneously from the student accommodation houses in “Pushkin” as a result of the bad conditions in the dormitory rooms (low temperature and a lack of hot water and electricity).
The evolution from individual strikes to a country-wide mass protest was seen on 5th November 1987 in the heavily industrialised city of Brașov. Most of the workers had to provide for their families and thus their main grievances were the cutting of wages and unaffordable or the lack of consumer goods, both of which were necessary to ensure a stable family life.
Government buildings were stormed and Party symbols were destroyed as a sign of distrust toward the regime. The reaction of the communist authorities was relatively proportionate in relation to the nature of the protests. Protesters were arrested, questioned by State Security officers, and some of them were sentenced to time in prison.
This all but underlined the authorities’ fear of escalating events amid the social crisis within the working class. Two weeks after the protests in Brașov, Doina Cornea, an emblematic Romanian dissident figure and her son, Leontin Iuhas, were arrested for distributing manifestos of solidarity with the workers who organised the strike.
After 1980, the opposition of the global Romanian diaspora grew in intensity. This forced the authorities in Bucharest to take punitive actions abroad as well. Thus, on 28th July 1981, on his way to the garage of his house in Munich, the producer of Radio Free Europe, Emil Georgescu, was stabbed by two French assassins hired by Romanian State Security. Within Romania, the authorities resorted to similar punitive measures.
The members of the “Movement for Freedom and Social Justice in Romania” (M.L.D.S.R.) were also influenced by the spirit of the Polish “Solidarity” movement. The organisation was a socio-political project conceived and initiated in the early '80s by an employee of Romanian Television, Dumitru Iuga.
On 27th January 1984, a military tribunal sentenced Iuga to 12 years in prison. Moreover, he was denied certain rights for being accused of conspiracy against the state. On 21st September 1985, engineer, writer, and dissident Gheorghe Ursu was arrested. He died in Rahov after endless inhumane treatment by the Securitate. The reason for his arrest was entirely fabricated; Ursu was accused of holding the currency, which was illegal at the time.
In December 1987, various opponents such as Radu Filipescu or Gabriel Andreescu were arrested, interrogated, and beaten, after having been accused of disseminating anti-communist manifestos or urging citizens to hold referendums on various decisions taken by authorities without having consulted the population.
The punitive actions of the regime were diverse and included the marginalisation or dismissal of some opponents, or their discrediting in the eyes of public opinion. Some of the victims were Romanian intellectuals such as the poet Ana Blandiana, who lost the right to publish on 30th August 1988 after the publication of a children's book in which she parodied Ceauşescu.
The dissatisfaction felt within society did not leave journalists unaffected either; they refused to obey the Party and petitioned for more rights. Thus, on 26th January 1989, journalists Petre Mihai Băcanu, Mihai Creangă and Anton Uncu were arrested and interrogated.
The dissatisfaction of the people, who felt powerless in the face of the regime, reached its peak in 1989. A sinister gesture took place on 2nd March, when Liviu Babeş set himself on fire while skiing downhill in Poiana Braşov to protest against the suppression of the workers' revolt in Brașov. His message for the authorities was later seen on the side of a tree, which read in Romanian and German: “Stop death! Braşov = Auschwitz!”
Against the backdrop of the crisis, six prominent members of the Communist Party (Gheorghe Apostol, Alexandru Bârlădeanu, Corneliu Mănescu, Grigore Răceanu, Constantin Pârvulescu and Silviu Brucan) wrote a protest letter to Ceauşescu where they explicitly disagreed with his policies and suggested a number of reforms.
The letter was made public by the BBC and Free Europe radio stations on 11th March 1989. It caused a lot of resentment towards the dictatorial couple who then took revenge. On 13th March, the diplomat Mircea Răceanu was sentenced to death after having been accused of treason and transmission of state secrets. His only crime was that he was the stepson of Grigore Răceanu who was one of the six signatories of the aforementioned protest letter.
The first public anti-regime demonstrations took place on 5th December in Timişoara. In a few days, the protests became mass riots and spread to large cities, especially the capital. Law enforcement intervened brutally, even opening fire on protesters. The central moment of the collapse of the regime took place on 22nd December, when Ceauşescu left the headquarters of the Central Committee of the Romanian Communist Party in his helicopter.
Certain units of the army and security participated in skirmishes that led to several casualties. These resulted from diversions set up by the new leadership, which took advantage of spontaneous revolts and which wanted to gain internal legitimacy and external credibility. The initial power vacuum made the formation of the National Salvation Front (FSN) possible in December 1989, with key-members from the second and third echelons of the Communist Party, Army, and several intellectuals.
On 25th December, the Ceauşescu couple (Nicolae and Elena) were arrested near Târgoviște and sentenced to death by a military tribunal, following a very quick trial (between 13:20 and 14:40). They were then executed by a local military unit.
Mihai Dragnea is associate researcher at the University of South-Eastern Norway. He is the president of the Balkan History Association and the editor of Hiperboreea, the journal affiliated to the association, published by the Pennsylvania State University Press. His interests and collaboration include cultural, social and political relations between Germans, Scandinavians and Wends during the High Middle Ages, Viking Age, early Slavic ethnicity and state formation, and identity and conflict in the Balkans during the last century.
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