Ponta victory still expected even as Romania’s presidential race tightens

By bne IntelliNews November 13, 2014

Clare Nuttall in Bucharest -


Romanian Prime Minister Victor Ponta is expected to secure a victory in the second round of the country’s presidential elections on November 16, despite a backlash against his government over the failure to ensure Romanians living abroad were able to vote in the first round of the election.

The latest poll from CSCI/Infopolitic published on November 13 shows that with just three days to go Ponta’s 10-point lead over his rival centre-right candidate Klaus Iohannis has narrowed to eight points. However, Ponta is still expected to win with 54% of the votes cast.

In the first round, Ponta had a clear lead on 40.44%, followed by Iohannis on 30.37%, with Calin Popescu Tariceanu trailing in third place with just 5.36%. Since then, however, popular sentiment has turned against the government to some extent after poor planning made it impossible for many of Romania’s diaspora – estimated at some 4mn – to cast their votes on November 2.

Huge queues and chaotic scenes were reported at embassies in London, Paris and other cities with a large Romanian diaspora, with many voters unable to enter the polling booths before the polls closed for the day. Police had to be called to the Romanian embassy in Paris after disputes broke out between officials and angry voters. Both Ponta and President Traian Basecu blamed the chaos on Foreign Minister Titus Chorlatean, who resigned on November 11.

Thousands of people demonstrated in cities across Romania on the weekend of November 8-9, demanding that the authorities ensure Romanians abroad are able to vote on November 16. The largest protests were in the prosperous northwest, the main power base of the opposition Liberal Christian Alliance (ACL). A few hundred people gathered in Bucharest, but much larger crowds – some numbering several thousand – were reported in regional centres including Cluj and Timisoara. More are planned for November 15, the eve of the second round ballot.

Increasing the pressure on Ponta is the fact that the failure to allow diaspora Romanians to vote most likely increased his margin on November 2. Past elections have shown that the majority typically vote for rightwing candidates. In 2009, for example, diaspora votes were critical in securing the presidency for Basescu. On November 2, Iohannis took 46% of the votes from Romanians voting from abroad, compared with just 16% for Ponta.

Softly, softly

Throughout the campaign, Ponta has benefitted from his high profile, and the government’s softening of earlier austerity cuts since his Party of Social Democrats (PSD) 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 President Basescu and the International Monetary Fund (IMF).

Romania’s economic performance this year has been a concern, after the country fell into technical recession in the first half of 2014. In a televised debate with Iohannis on November 12, Ponta claimed that Romania’s GDP increased by more than 1% on year in the third quarter – preempting the statistics office’s plans to announce third-quarter GDP data on November 14. Similarly, Ponta announced the central bank’s decision to cut the policy interest rate shortly before the first round of the presidential election.

Ponta’s preempting of key announcements from the statistics office and central bank has raised questions about their independence. While information may simply have been leaked to the government, there is speculation that Ponta is using his position to exert influence over the two institutions.

There are already concerns that with a relatively solid parliamentary coalition behind him, on becoming president Ponta might go down the road of “Putinisation” as seen in other countries in the region, with examples such as Hungary’s Victor Orban and Turkey’s Recep Tayyip Erdogan. Questions about his respect for the judicial process and rule of law were initially raised shortly after he became prime minister in 2012, when he launched an attempt to impeach Basescu.

However, Ponta’s progress does not seem to have been affected by the series of corruption scandals that broke during the presidential campaign period. These included 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, including nine former ministers.

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. Ponta has denied the allegation.

Iohannis, mayor of the provincial town of Sibiu, has a much lower national profile than Ponta, despite being re-elected by landslides in his home town. One of the ethnic German minority present in Transylvania since the 12th century, Iohannis is running mainly on his clean reputation and Ponta’s camp have found relatively few grounds to attack their rival.

Iohannis 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.

The undecided

Both candidates are now trying to attract voters from other candidates eliminated in the first round of the election.

Ponta indicated shortly after the first round results came in that his top pick among three possible candidates to succeed him as prime minister would be Tariceanu. The prime minister is thereby hoping to persuade those who cast their votes for Tariceanu in the first round to back him in the second. Appointing a successor from outside the PSD could also benefit Ponta by avoiding giving too much power to any rival within his own party.

While Tariceanu’s supporters may gravitate to Ponta, Iohannis is likely to attract supporters of other candidates such as Elena Udrea and Monica Macovei, as well as those representing Romania’s ethnic Hungarian minority, who typically favour rightwing candidates.

A win for Iohannis would most likely replicate the often-tense cohabitation seen between Ponta and Basescu over the last two years. With the PSD the largest party in both houses of parliament, Iohannis would not be in a position to topple the current government should he be elected though. As such, “he would likely attempt to shift the balance in the parliament and induce changes in the composition of the cabinet,” Teneo Intelligence argues.

The first task of the new government will be to plan the 2015 budget. While discussions have been underway within the current cabinet, finance ministry officials have said that plans will be discussed with the IMF in December and endorsed in January by the new cabinet.

Teneo Intelligence writes that while “significant changes to the current course would be unlikely,” the government is expected to tighten the budget for 2015. “The IMF has postponed the Romanian stand-by program review over Ponta’s fiscal policy loosening in the run-up to elections. The review will probably resume in late November and consolidation measures will likely be worked into the budget proposal for 2015,” the consultancy says.

There is also pressure on the government to make better use of EU cohesion funds and boost infrastructure investment, though this would conflict with plans for a tighter budget. 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 to it, spending around €7.1bn.

Other important decisions being put off until a new government is formed concern 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 sold off 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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