In a move that could finally clear the way for a new government weeks after a divisive presidential election, Romania’s Centrist President Nicușor Dan has nominated National Liberal Party leader Ilie Bolojan to be the country’s prime minister. Once Bolojan has formed his cabinet, a parliamentary vote of confidence next week is required to confirm the new government and enable it to begin tackling what is the largest budget deficit of any European Union member.
Should Romania fail to take the requisite fiscal measures by the end of this month, it faces the prospect of losing EU funds plus a downgrade in the country’s investment rating.
Senate speaker Bolojan, a former mayor and county council head with a track record for carrying out reforms, is widely respected. He said he was convinced “that we can overcome this difficult situation and put Romania back on the right path.”
The Bolojan cabinet is likely to consist of members from his National Liberal Party (PNL), the centre-right Save Romania Union (USR), the ethnic Hungarian party UDMR, and the centre-left Social Democrats (PSD), which is Romania’s largest party. PSD initially resisted throwing its support behind the leader of another party as prime minister but relented after an understanding was reached that Bolojan will relinquish the position in 2027, ahead of parliamentary elections scheduled for the following year.
“It is in Romania’s interest that the government is supported by a solid majority, and the parties have understood this”, Dan declared. Despite his presidential election victory over the far right, the country remains highly polarised, and the parties are expected to wrangle over the tax hikes required to address the current deficit situation.
Before last month’s presidential election, Dan had committed not to raise the value added tax, which has a top rate of 19%.
With Romania’s international rating level hanging in the balance, Fitch and S&P are expected to visit the country in June-July. According to Reuters news agency, a knowledgeable source about talks involving Romania, the European Commission and the ratings agencies claims that at least one agency has been looking for tax and spending cuts amounting to at least 2% of GDP.
