The relationship between Romanian Prime Minister Mihai Tudose and the leader of the senior ruling Social Democratic Party (PSD), Liviu Dragnea, has reportedly become tense just days after the new premier was appointed. 

Although his party and its coalition partner have a majority in both houses of parliament, Dragnea cannot become prime minister as he has a criminal conviction. In Tudose and his predecessor Sorin Grindeanu, Dragnea sought to appoint loyal lieutenants who would carry out his policies, but this went badly awry in the case of Grindeanu. 

Romania’s previous prime minister Grindeanu was ousted by his own party, the PSD, six months after his endorsement following a no-confidence in parliament in June. While Dragnea claimed his government has performed poorly, the relationship between Dragnea and Grindeanu was rumoured to have worsened earlier this year when Grindeanu repealed a controversial government emergency decree that would have partly decriminalised abuse of office.

Unnamed PSD sources quoted by Hotnews.ro said that the tensions between Dragnea and Tudose were sparked by the latter’s plans to replace the head of the tax collection agency ANAF, Bogdan Stan. However, Dragnea would reportedly oppose such a measure. According to Hotnews.ro, Grindeanu had also planned to remove Stan, but Dragnea opposed the move.

Another source of tension between Dragnea and Tudose is the newly revised governing programme. According to political sources quoted by Antena 3, a TV station close to the PSD, Tudose has reportedly refused to put into practice the new governing programme recently announced by Dragnea, claiming that the new taxes envisaged in the programme would destroy the economy and companies.

Several associations representing major investors in Romania have already spoken out against the updated governing programme presented by the PSD on June 29. 

Tudose wants to make significant changes to the Fiscal Code starting from next year. The novelties include switching from the current flat 16% income tax to a tax on turnover for companies, the introduction of a solidarity tax for high income earners and substantial increases in the minimum wage. 

However, there are already signs that the rift over the tax amendments has been resolved, as Dragnea said on July 5 that two of the measures included in the governing programme, the tax on turnover and the solidarity tax, will not be put into practice if they affect “companies operating correctly” or if the expected positive effects do not materialise, according to Hotnews.ro.