Clare Nuttall in Bucharest -
Exit polls and preliminary results from the first round of voting in Romania’s presidential election on November 2 indicate the election will go to a second round run-off between Prime Minister Victor Ponta and centre-right candidate Klaus Iohannis. Ponta is ahead in the polls, but with a narrower margin over his rival than expected, meaning both candidates have a real chance to take the presidency.
Preliminary results released at 05:00 on November 3, with around 56% of votes counted, put Ponta on 39.57% and Iohannis, the candidate for the Liberal Christian Alliance (ACL), on 30.19%. In third place was independent candidate Calin Popescu Tariceanu with just 5.83% of the vote, according to the Central Election Office.
Ponta was widely expected to win the election, which for several months has clearly been a two-horse race, in a second round run-off against Iohannis. The vote follows a campaign dominated by personal issues and corruption scandals, with economic policy taking a back seat.
However, with the gap between the two main candidates narrower than polls predicted, Iohannis now has a fighting chance in the second round vote set for November 16.
The final result will now hinge on how many supporters Ponta and Iohannis can drum up among Romanians who cast their votes for other candidates in the first round. This process could favour Iohannis; while Ponta is expected to fight to bring Tariceanu’s supporters onside, supporters of other candidates such as Elena Udrea, Monica Macovei and candidates representing Romania’s ethnic Hungarian minority are almost certain to support Iohannis.
In almost all presidential elections in Romania since 1989, the winner of the first round of voting has gone on to be elected president. However, in the 2004 presidential election the Social Democratic Party’s (PSD) Adrian Nastase took the largest share of the vote in the first round, but was overtaken in the second by Romania’s current president, Traian Basescu.
The popularity of Ponta and his PSD stems largely from the softening of earlier austerity cuts since the party came to power in the 2012 parliamentary elections. This includes a decision approved by the parliament in September to cut social security contributions, which was politically popular but went against recommendations from both Romanian President Traian Basescu and the International Monetary Fund.
Iohannis, meanwhile, has a much lower national profile than Ponta. One of the ethnic German minority present in Transylvania since the 12th century, and the mayor of the provincial town of Sibiu, he is running mainly on his clean reputation. He has been mayor of Sibiu since 2000, being re-elected by landslides in both 2004 and 2008 as he turned the town into a prosperous tourist hub.
He was selected as the candidate for the ACL, formed earlier this year through the merger of Romania’s two main centre-right parties, the National Liberal Party and the Democratic Liberal Party, with the aim of fielding a single candidate against Ponta. Ponta’s camp have found relatively few grounds to attack their rival, focusing mainly on his personal wealth.
Mihai Bogza, president of the Foreign Investors Council which represents international investors in Romania, told the Business Review Foreign Investors Summit on October 14 that there had been very little focus on the economy during the election campaign. Instead, the pre-election period has been dominated by a series of breaking corruption scandals that have hit politicians from both left and right.
A scandal concerning the sale of software licences and IT equipment to schools - dubbed the “Microsoft case” - has cast suspicion on top politicians and businessmen, with no less than nine former ministers named by the Anti-Corruption Directorate (DNA) as suspects.
Ponta has carried out a series of reshuffles within the PSD in the run-up to the election, both to secure his position against potential rivals and to improve its reputation by purging members hit by scandal. On October 21, the party’s governing body said it was suspending three high-ranking members, national executive committee member Sebastian Ghita and vice presidents Dan Sova and Marian Vanghelie, from their positions within the party. “I auto-suspended them,” Ponta told a press conference, citing their alleged involvement in various scandals.
Basescu, a long-time political foe of Ponta’s, also increased the pressure on his expected successor by accusing him on October 14 of being a former spy. “Victor Ponta must admit that he was an undercover officer of SIE [Foreign Intelligence Service], between 1997 and 2001," Basescu said in an interview with Realitatea. Basescu claimed the news was “a reality which I am ready to prove". Ponta has denied the allegation.
However, Basescu, who must stand down as president in November after serving two consecutive terms, has been almost equally critical of Iohannis, saying on September 30 that both candidates were “equally immoral and equally unfit to lead Romania,” the Romanian daily Ziare reported.
If Ponta succeeds Basescu, this will bring an end to an often acrimonious, always uneasy two-year cohabitation between the two. One of Ponta’s first actions after becoming prime minister in 2012 was to launch an attempt to have Basescu impeached by national referendum.
While the attempt was unsuccessful, it drew sharp criticism from the EU and has also raised questions about Ponta’s respect for the rule of law and the justice system should he become president. There are fears that Ponta could follow Victor Orban, prime minister of neighbouring Hungary, or Turkish President Reycep Tayyip Erdogan in the “Putinisation” of another European country.
As president, he would most likely have strong support from the parliament, where the PSD is the largest party in both the Chamber of Deputies and the Senate, though it falls short of a majority in either. In the lower house, the government - composed of the PSD, UDMR, PS and national minorities - holds 227 of the 405 seats, and Romania’s next prime minister would almost certainly be selected from the PSD. Unlike under the Ponta-Basescu cohabitation, this would make it easier for a future government to carry through its agenda.
Romania has had a mixed economic performance this year, falling back into technical recession in the first half of 2014 after appearing to rebound from the crisis in 2013 when GDP expanded by 3.5%. Foreign direct investment (FDI) also dropped by 13.8% in the first half of the year, with uncertainty over changes to the tax regime one of the main contributing factors, though it rebounded later in the year. The state statistics office is expected to announce third quarter GDP on November 14, just two days before the second round vote, and if the economy has performed poorly, this could count against Ponta.
Romania has also failed to utilise EU cohesion funds for investments into infrastructure. Along with neighbouring Bulgaria, Romania has the lowest absorption rate in the EU. During the 2007-2013 EU budgetary period, Romania absorbed only 37.2% of the €19bn available, spending around €7.1bn.
Another important decision being put off until a new government is formed concerns Romania’s ongoing privatisation programme. Following the successful IPOs of Electrica, Romgaz and Nuclearelectrica in 2013 and 2014, another major energy company Hidroelectrica is due to be IPO’d in 2015. Decisions are also expected in early 2015 on the privatisations of Constanta Port, Bucharest Airports and salt monopoly Salrom.
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