Insight

Despite familiar risks, Romania has a shot at unprecedented stability

A potent centre-right coalition, if kept together, could usher in a new era of political and economic stability in Romania. This path is dotted with familiar risks, however.

Romania is at a historic crossroads with tremendous opportunities. With the president, the PNL-led government, and many municipalities hailing from the same political camp, the interests of the executive and legislative branches seem to be aligned at last. While slim, the coalition’s majority in parliament should suffice for it to introduce much-needed reforms and a comprehensive fiscal consolidation strategy to set the country on a long-term growth path. 

While there are grounds for optimism, the outlook remains riddled with risks. Beside continued epidemiological uncertainty, the success of administrative reforms designed to improve the absorption of EU funds is not guaranteed: a bureaucratic overhaul is a trying challenge for a new coalition, and a strong PSD in opposition will be creative in finding ways to block the transformation.

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