BUCHAREST: Romania’s president will start discussions on Monday on forming a new government, his office said, with a centrist-led coalition seen as the most likely outcome a week after inconclusive elections.
The left-wing opposition PSD made big gains in Sunday’s vote, riding a wave of discontent over the pandemic and economic turmoil – but it failed to win enough votes for a majority.
The centrist Liberals (PNL), who led the last government, were in poll position to form a coalition with the USR-Plus party and the ethnic Hungarian UDMR, after the three together secured 53% of seats.
They would face the daunting task of using that slim majority to restore confidence in an economy that analysts say has been hurt by decades of fiscal largesse, which has brought Romania to the brink of losing its investment grade status.
Fitch Ratings said on Thursday the 2021 budget plan will be a near-term test of any future administration’s power and policy plans.
“Romania’s general election result points to continued political uncertainty and hence a still-challenging policy-making environment,” it said in a statement.
“The formation of credible medium-term fiscal consolidation plans remains an important consideration in our sovereign rating assessment,” it added.
Ratings agencies have Romania on their lowest investment grade with negative outlooks.
On Wednesday the PNL proposed Finance Minister Florin Citu as the next prime minister. President Klaus Iohannis, a PNL ally, is widely expected to endorse him.
Under Romanian law, the president nominates a prime minister following an election and any necessary coalition talks, and can bypass the winning party if it fails to secure an outright majority.
U.S.-educated Citu, who has worked for the European Investment Bank and New Zealand’s central bank, would have to form a cabinet within 10 days of being nominated.
A vote of confidence to endorse the new cabinet could take place in parliament by Dec. 23.
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