Romania's next government likely to include all four pro-European parties, party leader says
Romania's President Nicusor Dan speaks during a press conference with Moldova's President Maia Sandu following their meeting in Chisinau, Moldova June 10, 2025. REUTERS/Vladislav Culiomza
Romania's next government likely to include all four pro-European parties, party leader says
BUCHAREST - Romania's new government will likely include all four of its pro-European parties after weeks of negotiations, centre-left Social Democrat leader Sorin Grindeanu said on Thursday following talks with centrist President Nicusor Dan.
Dan won a divisive presidential election last month despite a strong challenge from the increasingly popular far-right but not before borrowing costs rose sharply and the leu currency crashed.
He must now nominate a prime minister to tackle the highest budget deficit in the European Union, and the new government has until end-June to approve fiscal measures or risk a ratings downgrade from the last rung of investment grade.
Dan's first choice for prime minister is Liberal Party leader Ilie Bolojan, who also has the backing of centre-right Save Romania Union and the ethnic Hungarian Party UDMR.
But the centre-left Social Democrats, without whom a ruling majority cannot be achieved, have pushed back against the idea of supporting the leader of a different party for the post and have proposed a yet-to-be-agreed rotating premiership to run until Romania's next parliamentary election in 2028.
"Based on what we discussed - economic measures and political agreement - things seem headed in the correct, constructive direction," Grindeanu told reporters after consultations with Dan, adding that he saw an 80%-90% chance that all four parties would form the next government.
The European Commission, ratings agencies and analysts have said Romania cannot reduce its budget deficit over seven years to the EU's threshold of 3% of national output, as agreed, without hiking taxes. However, Dan and the four putative coalition parties have proved reluctant to enforce unpopular tax hikes, focusing instead on possible state spending cuts.
The fiscal package will likely save around 30 billion lei ($6.85 billion) and entail an equal mix of spending cuts, postponed investments and tax hikes, politicians said.
Sources have said the main value-added tax could rise to 21% from 19% despite vocal public opposition from Dan and party leaders. REUTERS
Join ST's Telegram channel and get the latest breaking news delivered to you.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
26 minutes ago
- Straits Times
EU's main political group on collision course with Germany over budget increase demands
BRUSSELS - The European Union's next long-term budget must be bigger than the current one, the main political group in the European Parliament said, putting itself on a collision course with the biggest contributor Germany, which does not want any increase. The centre-right European People's Party, with 188 deputies in the 720-seat parliament, is the EU's biggest political grouping and its support will be crucial for a deal on the EU's 2028-2034 budget, which pays for joint EU policies. For decades, the budget, called the Multiannual Financial Framework, has been around 1% of EU gross national income, now about 1.2 trillion euros ($1.38 trillion) over seven years. "New priorities require new own resources to cover both debt repayments and the Union's increasing spending needs. We cannot do more with less," said Siegfried Muresan, who is the vice-chairman of the party and a negotiator for the next EU budget. The EU budget pays to equalise standards of living across the 27-nation bloc, support farmers, research and development, innovation, border management and climate action. But governments also want it to also help with security and defence and to strengthen Europe's industrial base to compete more effectively with China and the United States in leadership in clean and digital technologies. "The EU budget has a key role in making Europe safer. We need a more ambitious allocation for security and defence. Therefore, a moderate, limited increase of the budget is unavoidable," Muresan said. Germany, the budget's biggest net contributor, does not want to pay more into the common European pot. "There is no basis for increasing the ... (EU budget) volume relative to Gross National Income," a German document spelling out Berlin's position showed. OWN RESOURCES Apart from national contributions, which make up the bulk of EU budget revenues, it also gets money from "own resources" - revenues from a share of the Value Added Tax collected by governments, from tariffs and national contributions based on the amount of non-recycled plastic packaging waste generated by a member state. There is discussion on expanding such dedicated sources of revenue to boost EU income, especially as a way to repay the hundreds of billions of euros the EU jointly borrowed to restart its economy after the COVID pandemic. Germany has left the door open to increasing EU budget revenues in this way. "The Federal Government will ... constructively examine the Commission's proposals in this regard, so that ... repayments will not have to be made at the expense of the regular EU budget," the German government paper said. The European People's Party also pushed back at ideas that the next EU budget should link disbursements to an EU country reaching reform milestones and targets, as is the case in the EU post-COVID Recovery Fund. "Local and regional authorities and other beneficiaries cannot be penalised or held accountable for reforms that are not implemented at the national level," the Party said in a statement. The Party also said it did not want further centralisation of spending plans at government level. "Regional and local authorities know better the needs and specificities on the ground." REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
an hour ago
- Straits Times
Iran crisis and its impact on oil, shipping, inflation and the global economy
People watch from a bridge as flames from an Israeli attack rise from Sharan Oil depot, following Israeli strikes on Iran on June 15. PHOTO: REUTERS When Israel launched a coordinated strike on Iran's military leadership and nuclear facilities on June 13, many analysts and investors were quick to downplay the global economic repercussions. The consensus: The shock would be sharp, but short, and ultimately, transient. In just a few days, the view has now swung to the other side. Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
an hour ago
- Straits Times
Nine EU countries call for talks on ending trade with Israeli settlements
FILE PHOTO: Hava pushes her daughter Yahav in a pram near their home in the Jewish settlement of Givat Haroeh in the Israeli-occupied West Bank, February 21, 2023. REUTERS/Ronen Zvulun/File Photo FILE PHOTO: An aerial view shows the Jewish settlement of Maale Adumim in the Israeli-occupied West Bank, June 25, 2023. REUTERS/Ilan Rosenberg/File Photo Nine EU countries call for talks on ending trade with Israeli settlements BRUSSELS - Nine European Union countries have called on the European Commission to come up with proposals on how to discontinue EU trade with Israeli settlements in the occupied Palestinian territories, according to a letter seen by Reuters on Thursday. The letter, addressed to EU foreign policy chief Kaja Kallas, was signed by foreign ministers from Belgium, Finland, Ireland, Luxembourg, Poland, Portugal, Slovenia, Spain and Sweden. The EU is Israel's biggest trading partner, accounting about a third of its total goods trade. Two-way goods trade between the bloc and Israel stood at 42.6 billion euros ($48.91 billion) last year, though it was unclear how much of that trade involved settlements. The ministers pointed to a July 2024 advisory opinion from the International Court of Justice, which said Israel's occupation of Palestinian territories and settlements there are illegal. It said states should take steps to prevent trade or investment relations that help maintain the situation. "We have not seen a proposal to initiate discussions on how to effectively discontinue trade of goods and services with the illegal settlements," the ministers wrote. "We need the European Commission to develop proposals for concrete measures to ensure compliance by the Union with the obligations identified by the Court," they added. Israel's diplomatic mission to the EU did not immediately respond to a request for comment. Belgian Foreign Minister Maxime Prevot said Europe must ensure trade policy is in line with international law. "Trade cannot be disconnected from our legal and moral responsibilities," the minister said in a statement to Reuters. "This is about ensuring that EU policies do not contribute, directly or indirectly, to the perpetuation of an illegal situation," he said. The ministers' letter comes ahead of a meeting in Brussels on June 23 where EU foreign ministers are set to discuss the bloc's relationship with Israel. Ministers are expected to receive an assessment on whether Israel is complying with a human rights clause in a pact governing its political and economic ties with Europe, after the bloc decided to review Israel's adherence to the agreement due to the situation in Gaza. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
