Liberals’ Announcement

In a video posted on social media, Ciuca declared that the coalition has reached its political conclusion. He cited a recent Constitutional Court ruling that disqualified a far-right candidate as a primary concern, describing it as a significant threat to democracy in Romania. Despite the coalition’s dissolution, Ciuca affirmed that PNL would remain in government to prevent what he termed “abuses” by the PSD, arguing that stepping back would be irresponsible.

His remarks reflect deep frustrations with the PSD’s handling of critical issues and highlight the growing divisions between the two parties as they approach crucial elections scheduled for November and December.

Yet, the last straw that broke the Coalition’s back was when Ciuca highlighted a recent ruling by the Constitutional Court that disqualified far-right candidate Diana Șoșoacă from the presidential race, which he described as a politically motivated act that raises questions about the integrity of Romania’s democratic processes. Ciuca asserted that this ruling, made by a majority of judges appointed by PSD, effectively eliminated a political adversary and demonstrated what he termed an “abuse of power” inherent in the PSD’s governance style. He emphasized that such actions could lead to further political repression, warning that if left unchecked, PSD could undermine democratic institutions and media freedoms.

Socialists’ Response

In response to Ciuca’s announcement, PSD leader Marcel Ciolacu issued an official statement urging PNL to reconsider its decision. He emphasized the need for responsibility and dialogue, suggesting that PNL should return to the negotiation table to address their differences constructively. Ciolacu criticized Ciuca’s approach, warning that abandoning the coalition could lead to instability in governance at a critical time for the country. He underscored the importance of collaboration in tackling national challenges and maintaining a united front against extremist parties.

Implications for Future Governance

The dissolution of this coalition raises questions about legislative stability in Romania as both parties navigate a precarious political landscape ahead of upcoming elections. With both Ciuca and Ciolacu running for president in this electoral cycle, the dynamics between PNL and PSD will be closely watched as they seek to appeal to voters while managing their internal conflicts.

As Romania moves forward into this uncertain political climate, the calls for dialogue and responsibility from both sides highlight the complexities of governance in a divided political landscape. The coming weeks will be crucial as both parties attempt to define their paths amidst growing electoral pressures.

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Moreover, political preparations have been made—no current law allows the President to run for a position as a Member of the Parliament, so this had to be fixed. Hence, on Wednesday, September 18, the Liberals, the political party supporting the President, registered the draft of the bill to allow any President during the last three months of the mandate to run as an independent on the lists of any political party.

Sources say the Socialists won’t oppose the bill, and Klaus Johannis will promulgate the law after Parliament votes.

The scenario goes even further—the same sources say the President will be the first on the Liberal Party’s list for the Senate in Bucharest, undoubtedly making him a Senator. Sources say Johannis also aims for the Head of the Senate position, the second position in the State.

In addition, as the Liberals have very low chances of winning the presidential elections, Nicolae Ciuca, the current Head of the Liberal Party and party’s candidate for the presidency, will resign, and Klaus Johannis will be voted party leader.

The above confirms the political stakeholders’ expectations that a Socialist candidate (such as Marcel Ciolacu, the Socialist leader, or Mircea Geoana, the former Secretary General at NATO) will be elected as Romania’s President. Thus, by sharing the top state positions, the President and the Head of the Senate, respectively, Socialists and Liberals will be able to run the future governing coalition as they currently do.

Klaus Johannis was forced to aim for a position within the Romanian State, such as the Head of the Senate, after his pursuit of a top NATO or European position failed.

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Last week, Romania’s Prime Minister initiated consultations with the parties to set up presidential and general election dates. Following discussions with party leaders and mainly with the Coalition partners, a final decision was taken to set the electoral calendar for the presidential and parliamentary elections.

Presidential and General Elections Romania 2024

The elections will take place at the end of November – beginning of December, as follows:

• the first round of the presidential elections on November 24
• parliamentary elections on December 1 (National Day)
• the second round of the presidential election on December 8.

The controversy is that December 1st is National Day, so it is a free day for most people. That means voters will be on vacation, impacting their presence in the vote.

The opposition leaders accuse the ruling coalition of pretending to consult them, saying that the Socialists and the Liberals decided without considering other opinions.

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Romania’s Prime Minister Marcel Ciolacu’s decision to summon parties to consultation influences the presidential election dates in Romania. However, the decision was meant to keep the governing coalition alive while there were rumours that the presidential election could end it.

Today, we practically leave the previously established electoral calendar, the last day on which we could pass the Government Ordinance to establish the date of the elections.
That’s why I will invite the leaders of all political parties to establish the election calendar together from Monday with the two deputy prime ministers. This is the right approach and not changing a minister forced by his party not to initiate a previously agreed piece of legislation. I will not respond to challenges to trigger a governmental crisis and instability in Romania.

Romania’s Prime Minsiter Marcel Ciolacu

There are visible tensions between the Socialists and the Liberals who form the ruling coalition. The bone of contention was the presidential election date. Even though it was already agreed to be held on September 15 – round 1 and 29 – second round if necessary, the Liberals have changed their mind and wanted to postpone it until late autumn, while Socialists wanted the initial agreement to be respected.

The problem for the Liberals is that their presidential candidate, Nicolae Ciuca, has no time to improve his image drastically. Giant billboards have already been placed in the country, pushing Ciuca’s image as a man of honour and reminding electors of his military past. Yet, political consultants see it as too little and too late to offer him a good chance of winning the presidential elections.

The initial agreement of the Liberals was based on the potential successful candidature of Klaus Johannis for a high position at NATO or the European Council. In this scenario, Johannis would’ve resigned from the office earlier, leaving Nicolae Ciuca, now Head of the Senate and the second man in the state, as interim president until the elections. This would’ve boosted Ciuca’s image as a potential president, helping him even in early elections.

Both scenarios failed to fulfil, thus Joahnnis has to remain in the office until late December. This cuts Ciuca’s chances of becoming interim president, which is why Liberals need more time to improve his image.

After political consultations with the parties, Romania’s PM Marcel Ciolacu will announce the presidential elections’ agenda for this year.

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According to the answers, if elections were to be organized this Sunday, the results would look like this:

• PSD – Social Democratic Party (in power) – 28%
• AUR – The Alliance for the Union of Romanians – 22%
• PNL – The National Liberal Party (in power) – 18%
• USR – The Save Romania Union – 13%
• UDMR – The Democratic Union of the Hungarian in Romania (now in Opposition) – 6%

This is quite an exciting trend – while the Socialists and the Liberals, now forming the Governing Coalition, fall in voting intention, the Nationalists drastically increase. This trend follows the high inflation rate, the slowing down of the economy, and the people’s lack of trust in the Government.

The recent three-week strike of the teachers showed that society has far more profound problems, and disappointment with Government’s actions is acute. This is why the Governing parties – PSD and PNL, are dropping while AUR, the only Opposition party visible through actions rather than statements, grows.

Rumours of early elections are not rumours any longer, and political pundits expect such a move to be adopted by both PSD and PNL, for fear the Nationalists would grow even more.

Meanwhile, the recent PM rotation is seen as good by 12%, while 35% say it is terrible. 48% of respondents have a neutral attitude towards this topic, while 49% say things will stay the same. On the other hand, 34% say things will get worse.

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The agreement was that Nicolae Ciuca, the current Prime Minister, is to rule the Government until May 25th, when he would resign and let his Socialist colleague, the head of the Social Democratic Party, Marcel Ciolacu, be assigned as Prime Minister until the end of the current political mandate of the Parliament. This agreement is broken, as Ciuca decided not to resign.

The presidents of the three ruling parties appeared on national tv stations assuming this postponement in rotation. Marcel Ciolacu, who was expected to be Prime Minister this month, has to wait until the teachers’ strike is over. It could be weeks or months.

Nicolae Ciuca has his second questionable political moment. His first was precisely when he entered politics. As a former Chief of Army Staff, Ciuca promised not to enter politics when he retired. He failed to keep his promise and joined the National Liberal Party. Soon after, he became president of the Liberals and Prime Minister. Such a brilliant political career, right? Wrong, as political pundits say, Cuca is Romania’s President’s political puppet.

His second questionable moment was when he failed to keep his promise and resigned from office. Both moments show how much trust you can have in hearing a promise from him.

On the other hand, Marcel Ciolacu seems like a Socialist who dances when Liberals play a piece of specific music. Far from showing the same solid political posture of the former Socialist leaders, Ciolacu gave up any form of criticism of decisions taken by Liberals and preferred to remain silent but in power.

No solid opposition in Romania makes all these possible. The current Governing Coalition will keep power until 2024; no other alliances can oppose them until the next elections. In this context, Romania seems like a stable democracy from the outside, but people started noticing it’s far from that.

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According to the analysis’s authors, Klaus Johannis’s popularity registers a significant decrease among the population.

Johannis speaks little, and his public appearances have steadily decreased. His advisors stay out of the public eye and are believed to come from the business and intelligence world. (…) President Klaus Johannis’ popularity is now in freefall, as his attempt to reduce the influence of Parliament by allowing the purge of anti-corruption judges and bringing military figures into politics seems to be backfiring. His efforts in 2021 to forge a coalition between two typically rival parties that hold a parliamentary majority have undermined competitive politics and scrutiny of government actions.

Oxford Analytica

The future of Romania’s democracy is uncertain, given President Klaus Iohannis’s stance toward the military and intelligence service. The study emphasizes the case of PNL-PSD (National Liberal Party and Social Democratic Party), where the president’s role in dissolving the alliance between the PNL and USR ( Save Romania Union) and creating the coalition between the PNL and PSD, usually opposing parties, which have the majority of seats in Parliament, led to an increase of corruption in Romania. The analysis also demonstrates that his efforts undermined competitive policy and control over government actions.

President Klaus Johannis renounces his role as a mediator between state bodies and between the state and society. Fears are growing that a disorderly, sometimes chaotic, yet identity-pluralist system is being replaced by a monolithic version where corruption and inefficiency continue to thrive but without meaningful checks and balances.

Oxford Analytica

The experts claim that his desire to decrease the authority of the parliament, allow the purging of anti-corruption judges, and introduce military leaders into politics, raises an alarm signal about democracy in Romania.

The respective study followed several essential topics: the significant influence of the secret services and the army on Klaus Johannis and Nicolae Ciuca’s government; giving up any type of reform; destroying/stopping the anti-corruption fight; intimidation of anti-corruption magistrates; buying media.

According to Oxford Analytica, Romania could lose significant funding from the European Union due to legal issues, and Schengen membership is “unlikely” to happen. Additionally, according to British researchers, Romania wants to strengthen its secret services to monitor foreign investments in Romania. The analysis devotes a significant amount of attention to the legislative initiatives about the secret services and demonstrates that “the drafts were created by intelligence service personnel (a problematic legal act) with the knowledge of the President’s and Prime Minister’s offices.”

Photo source: Klaus Iohannis Facebook

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The Fiscal Code revisions have already been finalized. Still, the Social Democratic Party (PSD) and the Liberal Party (PNL) have already agreed on several crucial points. According to Prime Minister Nicolae Ciuca, the dividend tax will increase from 5% to 8%, the excise duty on alcohol and tobacco will go up, there will be a 40% tax on gaming profits, and there will be a tax on sugary soda beverages.

This comes after Romanian President, Klaus Johannis assured the Romanian people in May that taxes won’t rise in 2022. It seems like the ruling coalition’s endless debate on taxes resulted in an agreement since Romania’s economy started to collapse.

Adrian Codirlasu, financial analyst and vice president of CFA Romania, affirms on ZF, that he agrees with the decision to increase tobacco and alcohol taxes.

These increases can be justified. It does not create discrepancies, but it removes them. If I look at tobacco or carbonated soft drinks, they are not strictly necessary products, and the reduced VAT reaches the standard rate. It is reasonable, given that these products are harmful to health and involve higher medical expenses.

Adrian Codirlasu, financial analyst and vice president of CFA Romania

While expressing support for more reforms, Marcel Ciolacu, the head of the Social Democrats, acknowledged that some of them—including progressive taxation—would undoubtedly not go into effect in January 2023, when the other fiscal amendments are planned.

The Social Democrats would enforce deductibilities for gross wages below EUR 900, resulting in a tax rate of 0% on EUR 500 gross wages.

Additionally, Social Democrats would impose progressive taxation on “special” pensions exceeding EUR 1800 (40%) and EUR 3600 (90%) in turn.

The gross salaries in the public sector exceeding the Romanian President’s gross wage would be imposed a 40% income tax (instead of the standard 10% rate).

Liberals vehemently opposed the Social Democrats’ proposal to impose a 0.5 percent income special tax on businesses with yearly revenues above EUR 100 million.

The draft law enacting the tax hike has not yet been released, so it is unclear when the additional taxes will go into effect or their impact on revenue.

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The death of its leader, Corneliu Vadim Tudor, in 2015 made it even more complicated for the party to enter the Romanian Parliament again. This seemed to be the end of the nationalist movement in Romania.

The rest of the parties were so content about the failure of the nationalist to pass the required 5% to enter Parliament that they were constantly bragging about that, telling the Europeans that Romania doesn’t have any nationalist political formation in Parliament. The Romanian Socialists or the Liberals were quite convinced that this could make the Europeans start showing Romania a bit of respect.

However, it was not the case, as the Europeans had nationalist movements at home. Having or not having a nationalist movement in your backyard doesn’t mean anything. One country is not more or less civilized if it has a nationalist movement. It’s just the opinion of the voters, and every vote counts and has to be respected.

Now the situation is quite different. Another nationalist movement, more visible, action prone, and created on the same principles, is rising: AUR – the Alliance for the Unification of All Romanians. While PRM took its name from the Romanian territories’ unification, AUR means almost the same.

AUR succeeded in getting 9% of the votes during the last elections. It was enough to ensure they entered the Parliament. There was a shock for the Socialists and the Liberals at that moment. Now the surprise is even more significant.

After two years in the pandemic, with a growing pool of anti-European feelings, AUR has got to 17% voting intention with an increasing collection of anti-European emotions. From now on, the sky is the limit for the nationalists.

While the Socialists from PSD – Social Democratic Party dropped one point, the Liberals from PNL – National Liberal Party climbed one in the voting intention. Meanwhile, AUR reached 17%.

The rising of the nationalist movement happened in a context when this political formation behaved as the single one in the Opposition. This, of course, includes the latest protests at the Parliament, where people manifested against restrictions.

By taking the side of the majority of Romanians, fighting against restrictions, by manifesting against the abuses of the authorities, AUR leaders know they could go further, above 20%. This is when the party will play a significant role in Romania’s political and social life.

Along with this, we can expect two central ideas to be approached: the concept of the unification between the two sister countries, Romania and the Republic of Moldova, and the idea of opposing the autocracy of the European institutions. Euroskepticism will grow, and the thought of getting the country out of the European Union will increase awareness.

Does the European Union think Poland and Hungary pose a risk to the Union when discussing abandoning the European project? Wait and see what will happen in a year or so when AUR and the other parties will enter the pre-election year!

You might also be interested in reading the opinion poll in July 2023, which places AUR second in Romania.

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The governing coalition could’ve seemed improbable for many a few months ago, but politics is not a predictable science. The leftists, the Social Democrats, the rightists, the Liberals form the new Government and the Hungarian minority party.

The head of the Government, Nicolae Ciuca, a retired general of the Romanian Army, was proposed by the Liberals. This entitles the Social Democrats, according to the political agreement between the coalition parties, to have more ministries than the Liberals.

Another principle to have in mind when thinking about the new Government is that the current Prime Minister has to resign in May 2023 and leave the office for the Social Democratic PM, who will lead the Government until 2024, when elections are to be organized.

Specialists already see a tension between the former political enemies, and opinions state that this governing formula won’t last one year in power.

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