BUCHAREST BLOG: The life expectancy of Romania’s grand coalition mark 2

BUCHAREST BLOG: The life expectancy of Romania’s grand coalition mark 2
Romania's new PNL-PSD-UDMR government led by Nicolae Ciuca. / gov.ro
By Clare Nuttall in Glasgow November 27, 2021

The long political crisis in Romania — that looked at one point as if it would result in the first snap election in decades — came to an end on November 25 when the new government, a coalition comprising the centre-left Social Democratic Party (PSD), the centre-right National Liberal Party (PNL) and the Union of Democratic Hungarians in Romania (UDMR), was voted in by the parliament. 

The decision of Romania’s two biggest political parties to put their differences aside to form a government heads off the prospect of early elections, and puts a cabinet in place to tackle the urgent issues of the devastating fourth wave of the coronavirus pandemic, the post-crisis recovery, the highest inflation in the European Union and pressing social issues. But how long will this alliance between the rival parties last? 

The previous experience of a grand coalition doesn’t bode particularly well. Back in 2008, a similar coalition of rivals was formed by the Democratic Liberal Party (PDL) — which would merge into the PNL some years later — and an alliance between the PSD and the Conservative Party, which ran together in the November 2008 general election. The two groups, which together controlled 329 of the 471 seats in Romania’s two houses of parliament, united behind a government led by PDL president Emil Boc. Yet the coalition lasted just 10 months, from December 2008 to October 2010, before falling in a no-confidence vote, precipitated by Boc’s sacking of Dan Nica, the interior minister picked from the ranks of the PSD, prompting the party to quit the coalition. (Though Boc himself would remain prime minister until 2012.)

That previous grand coalition, just like the current one, came to power at a time of crisis. Romania had only recently joined the EU, in 2007, and that had a significant political impact as then president Traian Basescu pursued judicial and anti-corruption reforms that his opponents argued were politically motivated. Shortly after Romania’s entry to the EU, the international financial crisis hit; Romania’s GDP contracted sharply and there were widespread job losses. In March 2009, Romania became the third eastern EU member to require an international bailout, accepting a €20bn loan from the European Union, IMF and World Bank. One of the government’s final acts was to pass legislation reforming public sector pay, as required by the IMF. 

This time around, the formation of the new grand coalition, between the PSD and PNL came more than two months after the previous PNL-led coalition collapsed when the centre-right reformist Union Save Romania (USR) withdrew its support for then prime minister Florin Citu. Getting a new government in place was arguably a matter of even more urgency than it was back in 2008 as the latest wave of the pandemic — worsened by the low vaccination rate — overwhelmed hospitals and morgues. The new government will also need to ensure Romania takes advantage of the inflows of funds from the EU’s post-crisis recovery programme, and puts Romania’s own recovery back on a firmer footing after the disappointing growth figures from Q3. 

Several weeks of negotiations — that often seemed to be going nowhere — ended in an agreement that the parties would back the PNL’s preferred candidate Nicolae Ciuca as prime minister, before switching halfway to the next term general election to a candidate picked by the PSD — assuming the coalition lasts that long. The rest of the cabinet seats have been divided up among the two main parties and their smaller partner the UDMR. 

Ciuca’s governing strategy is a mashup of the two parties’ priorities, but the PSD had a stronger voice in negotiations as it is the largest party in the parliament, and the PNL has been weakened by internal divisions. 

As reported by bne IntelliNews, the Social Democrats promoted a package of social measures with an impact on the budget estimated at 1% of GDP, including increases to pensions, child benefits and the minimum statutory wage. But the measures outlined by Ciuca on November 19 also include no tax increases in 2022, as required by the Liberals, and no change to the so-called flat tax principle. Meanwhile, benefits for children over two years old will increase to RON243 from RON214, as the PNL insisted, rather than to RON300, as initially promised by the Social Democrats. 

There were positive words from the members of the new ruling coalition as well as from President Klaus Iohannis when the parliament finally backed the new cabinet. PSD leader Marcel Ciolacu pledged on Twitter that the government “will help stabilise the country during these challenging times caused by the pandemic & build a strong social recovery.”

Ciuca acknowledged in his address to parliament that “there were people who were surprised by the joining of the parties that make up the governing coalition today”. 

“We, who are before you today to ask for your vote of confidence, have gone over those things that separate us and we have found the things that unite us,” he added. “The pandemic has taught us one thing, that time is precious. We are determined to carry out this [governing] programme and put an end to the tense situation that our country is going through.”

But despite the unity on show, there is already speculation that the coalition won’t last until it’s time for Ciuca to hand over to the PSD’s nominee, much less until the next term election.

“The grand coalition between the country’s two largest parties PSD and PNL ends a protracted political crisis and improves the government’s ability to deal with the pressing challenges in the health, energy and economic sectors,” commented Andrius Tursa, Central & Eastern Europe advisor at Teneo, in a note.

“However, the trust among the coalition partners appears low and significant disagreements could emerge as soon as the pandemic subsides. In the medium-term, the coalition partners will increasingly vie for voter support ahead of the presidential and parliamentary elections scheduled for 2024.”

On top of the differences between the two parties, there are also internal tensions within the PNL. The party’s former leader Ludovic Orban, who lost the leadership election against Citu in September, recently quit in protest against the partnership with the PSD, taking some party members with him. “Some of the remaining PNL members are also critical of this partnership and internal divisions will only widen if the party continues to slide in polls. … Further defections from the PNL would become likely if Orban follows through on his plans to launch a new centre-right party,” Tursa said. 

Nonetheless, if the coalition manages to exist even for the coming months, there will at least be a functioning government in place in Romania at this critical time.