Romania’s political crisis gets 6-month truce as new government formed
The next test will be passing a budget in by the end of November, Romania's socialist leader tells POLITICO.
Romania recently ended five months of political uncertainty as its parliament unanimously elected Luca Niculescu as the new prime minister. This new government, however, comes with a six-month deadline for the parties to reach a more permanent agreement. The threat of early elections, which could see the populist right-wing Alliance for the Union of Romanians (AUR) gain power, made the center-right National Liberal Party (PNL) and the center-left Social Democrats (PSD) agree to form a government led by Niculescu, a former journalist and diplomat.
The Social Democrats will join the cabinet, while the liberals will stay out. Romania, the sixth-largest EU member, plays a crucial role in NATO's defense of southeastern Europe due to its major military base and U.S. missile shield site. The country has been struggling with political instability and a growing budget deficit in recent years, leading to a rise in support for hard-right nationalist politics.
The new government is set to present an investment-focused 2027 budget by the end of November, aiming to steer away from austerity and prioritize business support, public investment, and essential public services. The Social Democrats hope to revise the 2026 budget by the end of October and fast-track EU projects to unblock funds.
The formation of the new government makes snap elections less likely once the six-month deal expires, as Romania's constitution requires two failed attempts to install a government before Parliament can be dissolved.
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