New Romanian Government Approved, Easing Political Deadlock

Political Stalemate Resolved?

On 22 December, the Romanian centre–right coalition government headed by Acting Prime Minister Emil Boc of Liberal Democratic Party (PDL) received 276 out of 471 parliamentary votes. 135 legislators, mostly from the Social Democratic Party (PSD) and National Liberal Party (PNL) voted against Boc's government made up of the PDL, the Democratic Union of Hungarians in Romania (UDMR) members as well as a number of independents. Following the yes-vote, Boc announced that his government will proceed to pass much-needed economic reforms to help the country overcome the economic crisis that brought a 14% drop in GDP this year. The cabinet approval came after a narrow (50.3% vs. 49%) victory of the incumbent Traian Basescu of PDL over his rival Mircea Geoana, of PSD in the run-off presidential election on 6 December. Given that only two months ago the opposition led by the National Liberal Party (PNL) and PSD managed to stage two successful no-confidence votes against Boc's previous cabinet, the 22 December parliamentary approval of the new government went smoothly and was not marred with any controversies. Opposition leaders announced that the new government was given easy backing as all the political parties are interested in having a functioning government as soon as possible. This will allow the country to restart talks with the International Monetary Fund (IMF) to unblock the next 1.5-billion-euro (US$2.2-billion) tranche of a 20-billion-euro (US$28.5-billion) aid package, badly needed by cash-strapped Romania. However, the opposition leaders stated that once the country's economy is in better shape they will resume their political struggle with the government.

The Old and New Faces of the Government

Boc's cabinet is a mixture of former government PDL ministers as well as new arrivals from the UDMR and the independents. Of course, Boc himself is a not new to the post since he was a Basescu's Prime Minister until he was ousted on 13 October following the collapse of his government coalition with PSD (see Romania: 15 October 2009: Parliamentary No-Confidence Vote Topples Romanian Government). He was shortly reinstated by the incumbent after the latter secured his narrow victory over PDS hopeful Geoana. Boc's policies have not changed. His overarching goal is to unblock the international financial aid on which the ailing Romanian economy is currently heavily dependent. The government was counting on the release of the next IMF tranche to be received by the end of the year in order to pay public salaries. However, the political stalemate delayed unpopular but necessary belt-tightening decisions which in turn derailed the release of the tranche and put state finances under considerable strain.

The new Prime Minister hopes to lift the much-needed austerity policies including trimming public spending, cutting pensions and wages as well as proceeding with market–oriented reforms, all listed as mandatory for the release of the next IMF tranche. Boc has kept Adriean Videanu in his position of economy minister as well as Vasile Blaga as interior minister. The finance minister's post was handed to Sebastian Vladescu who held it in 2005-2007. Vladescu announced during his affirmation that he would not propose any tax rises, although he promised better tax collection. Most importantly Vladescu announced that 100,000 public-sector jobs will go, most of them by the way of not filling vacant positions. This move will be accompanied by a three-year salary freeze. Meanwhile the new Economy, Trade and Business Environment Minister, Adriean Videanu, highlighted restructuring mining as his priority which will shed a further 1,600 jobs, although he precluded any mine closures. Foreign policy will be led by Teodor Baconschi who identified close ties with Romania's neighbours as his priority. He also promised to finalise the accords on a strategic partnership with Poland and Turkey.

Outlook and Implications

It is perhaps ironic that Boc and his government managed to get more than the necessary votes in the parliament to see through the austerity measures that only in October served as the reasons for the government's collapse and his ousting from the PM's office. So what has changed? To put it simply, the autumn presidential campaign hijacked the economic agenda of Boc's government. The opposition saw Boc's agenda of necessary austerity measures, including job, pensions and salary cuts, as a weakness to be used against Basescu, who is PDL-associated, ahead of the presidential election. The opposition was hoping to win votes amongst impoverished Romanians who bitterly opposed any of the economic belt-tightening reforms. Despite all its efforts PDS failed to win in the presidential election. In the aftermath of heated political battles the political parties have returned to square one—they all acknowledged the need for the reforms that first took Boc out of the PM's office and have now brought him back.

Following the approval of his cabinet Boc announced that it was time to go back to reason and stability after long three months of political deadlock. The new cabinet has a solid backing as instead of the minimum required 236 it has managed 276 (PDL and UDMR together with the independent legislators could rally 241 votes, slightly more than the mandatory minimum). The extra votes would give Boc more confidence to proceed with its new budget for 2010 and his reforms to bring down the budget deficit to 5.9% of GDP in 2010 from the current 7.3%. The Romanian new cabinet's approval is the first welcome news in a long line of dramatic events that had pushed the country into a deep political turmoil and blocked international assistance. Boc's cabinet approval will turn that dark page of political deadlock to one of intensive reforms and economic recovery.