Talks on New Romanian Government Hit First Snag on Budget Plan
(Bloomberg) -- Attempts by four pro-European Romanian parties to form a coalition government and dial down political turbulence hit a hurdle over disputes on trimming the European Union’s widest budget deficit.
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At a meeting to discuss 2025 budget plans on Monday, members of the opposition Save Romania Union, or USR, questioned the accuracy of figures presented by Finance Minister Marcel Bolos. They demanded a commitment from all parties to rein in spending and avoid tax increases.
Romania has revised its budget-deficit estimate several times for this year, with a forecast now at 8.6% of economic output compared with an initial target of 5% on higher spending ahead of elections.
The Black Sea nation has been shaken by political turmoil after the surprise first-round victory of pro-Russian presidential candidate Calin Georgescu on Nov. 24. After security officials attributed his win to Russian meddling, Romania’s top court annulled the results of the vote and demanded a repeat.
The back-to-back elections brought a surge in support for the far right, including in the parliamentary election on Dec. 1, which saw the right wing win a third of the seats in the assembly.
That result led pro-European parties to pledge to form a coalition to keep populists out of power. Negotiations began between the ruling Social Democrats and Liberals as well as the opposition USR, an ethnic Hungarian party and parliamentary representatives of ethnic minorities.
Romania’s new parliament convenes on Friday. The need for a new budget is creating pressure on the parties to forge an agreement. Only once a government is formed can a date for the re-run of the presidential election be scheduled. Outgoing President Klaus Iohannis will remain in his post until the next head of state takes office.
The USR has agreed to continue the talks for now. But the party’s leaders, including Elena Lasconi, who would have faced Georgescu in the cancelled presidential run-off, will meet in coming days to decide if they’ll take part in the next government.
“It’s obvious that we don’t have the fiscal space to continue this style of governing,” said Cristian Ghinea, a USR member and former EU funds minister. “For us it’s unacceptable to discuss the government line-up first and then the measures. We want to agree on the measures and have a clear plan so that we know what to do.”
If the USR chooses to remain in opposition, the pro-European parties may have a less certain majority.
--With assistance from Irina Vilcu.
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