Romania's Political Reconfiguration: A New Coalition Takes the Helm

Romania's political landscape shifts as outgoing President Klaus Iohannis appoints Marcel Ciolacu of the Social Democrats to form a new coalition government. The alliance consists of Social Democrats, Liberals, and the UDMR party, aiming to prevent far-right influence amid chaos and annulled elections.

Romania is witnessing a significant political realignment as outgoing President Klaus Iohannis tasked Social Democrat leader Marcel Ciolacu with forming a new government on Monday. This decision follows an agreement among three pro-European parties that collectively command a parliamentary majority.

The coalition government, featuring Ciolacu's Social Democrats, the centre-right Liberals, and the ethnic Hungarian UDMR party, anticipates a vote of confidence from parliament later today. Together with minority representatives, the coalition holds control over roughly 54% of legislative seats. The recent political turmoil saw three failed attempts to elect a president after a far-right candidate surprisingly advanced in November's presidential election, leading to its annulment amid accusations of Russian meddling.

Moving forward, the new Romanian government plans to schedule a revised two-round presidential election, with the coalition parties rallying behind a single candidate, Crin Antonescu, to thwart far-right success. Ciolacu recognizes the challenging mandate ahead, particularly the need to restore investor confidence.

The new cabinet faces the formidable challenge of reducing the budget deficit from 8.6% of GDP, the highest in the EU, to about 7% by 2025, with tax increases expected by rating agencies and analysts.

(With inputs from agencies.)