Romania’s Social Democratic Party (PSD) has stalled internal reforms and the decision on who it wants to nominate for prime minister, hindering the formation of a new government and casting uncertainty over the fiscal consolidation timeline.

Despite losing electoral ground in 2024, the PSD remains the largest parliamentary force. However, its interim leader, Sorin Grindeanu, has yet to decide whether to nominate a PSD prime ministerial candidate or support the National Liberal Party’s (PNL’s) Ilie Bolojan, the likely consensus choice within the pro-EU coalition led by President Nicușor Dan.

"All scenarios are on the table, ranging from a PSD prime minister to the party going into opposition," Grindeanu told journalists at the parliament on June 5 according to Digi24, minutes after Dan praised the unity of the four pro-EU parties committed to forming a coalition.

Grindeanu also dismissed the urgency of convening a party congress to elect a permanent leader, saying, “I don't want to rush, I see that some are rushing. We want to do it as I said, slowly.” He added that other coalition partners, including the Liberals and Union Save Romania (USR), also have interim leadership structures.

“At this moment, my concerns are not related to this matter [holding a party congress]. I have a lot of things to do," he said, citing ongoing responsibilities as minister of transport and coalition negotiations.

Grindeanu concluded by questioning the legitimacy of his potential coalition partners: "At this moment, neither the PNL nor the USR seem to have legitimacy."

Grindeanu, a controversial figure since his tenure as prime minister during a 2017 scandal that sparked the biggest protests since the fall of communism, holds substantial influence in the ongoing negotiations but lacks a clear strategy. Internal party structures remain fragmented, with regional branches weakened by voter migration to the far-right Alliance for the Union of Romanians (AUR).

Meanwhile, the PSD has recently absorbed MPs from the far-right Party of Young People (POT) and SOS Romania parties, giving it close to 25% of the seats in parliament. 

The current impasse jeopardises the formation of a stable government and casts doubt on the fiscal strategy Dan seeks to implement by mid-June. The new executive was expected to be installed alongside a detailed budget consolidation plan by June 20, ahead of international reporting deadlines and upcoming market assessments.