Romania nears deal to form government after weeks of deadlock

Miami Herald

19-06-2025

BUCHAREST, Romania - Romania's pro-European parties closed in on an agreement to form a government as leaders set out to rein in a budget deficit that's become the widest in the European Union.
The National Liberal Party put forward its leader, Ilie Bolojan, to be prime minister. The long-dominant Social Democrats, which declined to designate a candidate, said a coalition accord between the main parties and two smaller partners is likely as negotiators put the final touches on a deal.
"It's hard to say at this moment that we're at a 100% probability for a four-party ruling coalition, but I think we're at about 80-90%," Sorin Grindeanu, the Social Democrats' interim leader, told reporters in Bucharest.
President Nicusor Dan, a centrist who beat back a far-right challenge to win the country's highest office last month, is expected to nominate a prime minister on Friday, according to people familiar with the plans who asked not to be identified as talks take place behind closed doors.
Once designated, the premier will have 10 days to form a Cabinet and seek a vote of confidence in parliament.
Romania was plunged into its gravest political crisis since the fall of communism late last year with the shock victory of an ultranationalist outsider in a presidential vote, which was subsequently annulled and rescheduled for May. Dan's victory signaled that voters want to hew to the nation's pro-European path amid growing geopolitical turmoil.
Dan has made clear that the government's top priority must be to scale back the budget deficit. The parties are seeking to overcome deep differences over how to address a fiscal gap that accounted for about 9% of economic output last year.
But the budget remedy, including impending spending cuts and tax increases, is likely to carry political risks - and be exploited by a surging far right. George Simion, who leads the ultranationalist Alliance for the Union of Romanians, scored a decisive first-round victory in the presidential contest on May 4, prompting the resignation of then-Prime Minister Marcel Ciolacu. But he went down to defeat two weeks later.
Romanian assets have rebounded since Dan's victory, with the yield on the country's 10-year domestic bonds falling by about a percentage point from over a two-year high last month. The yield now trades at 7.4%, the lowest level since April - but still the steepest borrowing costs in the E.U.
The four pro-European parties control 60% of the seats in parliament. The Social Democrats, who won an election in December and have the largest number of lawmakers in the chamber, will join the Liberals, the anti-corruption Save Romania Union and a party representing ethnic Hungarians.
Grindeanu said the Social Democrats will deliberate on whether to join the coalition on Friday, expressing optimism that members will sign off. The party had raised the prospect of supporting a minority Liberal-led government without joining the coalition, but opted for a broader agreement.
Romania, a member of the E.U. as well as NATO, has pledged to lay out a detailed plan to narrow the deficit to the European Commission by the end of this month. The E.U.'s executive arm has so far refrained from suspending E.U. funds, despite Romania's status under a so-called excessive deficit procedure. It instead called on Bucharest to adopt urgent measures.
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-With assistance from Peter Laca.
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