Mikula brothers in Romania
Another commonly used example is brothers Mikula, who condemned Romania for greater compensation. This case is very complicated, but generally presented as an example of how greedy businessmen benefit clauses to protect investors, while a state of practice is trying to put in order their laws – in this case to meet European practices. Here, however, the truth is somewhat different – taxpayers really might bear the price, but the reason is not the protection of investors and the classic kronikapitalizam and helpful government policies.
Mikula brothers who practically lead citizens of Sweden since the early 90s, have investments in Romania, which has a variety of “incentives” in the form of tax relief. In the late 90s, the Romanian government decided to give tax incentives for investments in certain disadvantaged areas. On 25 March 1999 the Government announced Nuchet city in Bihor region for backward area for the next ten years – this decision means that all tax incentives (state aid) in force in this area for the next ten years. Brothers Mikula benefit by receiving certificates in 2000 and 2002 that are permanent investors in the region and can benefit from the incentives.
In 2004, along the accession process to the EU and changing the regulatory framework – including and to meet the European rules on state aid, Romania practically terminated these tax incentives and remove the preferences brothers Mikula. Last sue on the basis of the investment agreement between Sweden and Romania since 2003. The key point in this case were those 10 years – brothers Mikula successfully defend the position that they had every reason to expect that tax incentives are effective for ’10 , as announced Romanian government in 1999. In 2013, Romania was ordered to pay 250 mln. dollars. This money is not paid at the time. Legal disputes continue, the European Commission continues to be of a different position and argued that such a payment – be it a case would be unregulated state aid. The case and currently remains open.
From this case, though convoluted, again we can conclude that he is often portrayed manipulative. Tax incentives, that incentives were a decision of the Romanian government and the ensuing disputes are due to the fact that these incentives have been given for 10 years. In this case we have a classic clientelism, wearing another policy to encourage disadvantaged areas. This policy is costly to taxpayers and Romanian has ended thanks to EU membership. The last case and awarded compensation only adds to the cost of a policy that favors some at the expense of everyone else. The problem is rooted in state policy, not the protection of investors.