Honor guard soldiers are silhouetted against a window before the meeting between Austrian Chancellor Sebastian Kurz and Romanian Premier Viorica Dancila at the Victoria palace in Bucharest, Romania, Friday, Dec. 21, 2018.(AP Photo/Vadim Ghirda)
Romania's government on Friday passed an emergency ordinance to levy extra taxes on banks and energy companies, the same day that Austrian Chancellor Sebastian Kurz suggested the measures could lead to foreign companies pulling out of Romania.
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Hours after Kurz made his remarks, Finance Minister Eugen Teodorovici announced the government had issued a decree to remedy a fiscal shortfall that risked exceeding the EU's limit of 3 percent of GDP. The measures included new taxes on banks, energy and telecommunication companies and a cap on natural gas prices.
The dispute showed an unusually fractious handover of the six-month EU presidency from Austria to Romania, which occurs on Jan. 1. Kurz made a one-day visit to the country Friday partly to prepare for that handover.
Teodorovici said the new measures aimed to "increase Romanians' prosperity, increase investment and correct incorrect practices in the banking and energy sectors" — areas in which Austrian companies have significant Romanian investments.
Kurz said Austrian companies could "take their things and leave," adding that the measures in Romania could lead to job losses and price hikes and could deter investors.
Kurz also directed criticism at Romania's Social Democratic government over its contentious judicial overhaul that opponents say will undermine efforts to fight high-level corruption. His message was embarrassing for Prime Minister Viorica Dancila, 10 days ahead of taking over the presidency from Austria.
Kurz used the visit to stress the importance of the rule of law, saying it was "important when there is a negative development for us to react and try to correct" backsliding.
He praised centrist President Klaus Iohannis for being "a guarantor of these things, he watches them and reacts to correct them. " Iohannis regularly criticizes the government.
Romania's government claims that prosecutors have too much power and Romania should be allowed to decide its own laws.
After Romania's government initially announced the proposed new tax measures this week, the Romanian stock exchange dipped to a 10-year low. Austria's OMW gas company fell 13 percent on what was dubbed "Black Wednesday."