Stratfor: Political Change Won’t Shift Romania’s Calculus

Posted on 07/02/2012 by

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Summary

Romanian Prime Minister Emil Boc resigned Feb. 6 amid protests against austerity measures taken by the government. Boc had to resign after losing the support of his own party, the Democratic Liberal Party (PDL), which will now seek to ensure its continuity in power and to achieve its political goals. But even if the opposition moves into power, Romania will hardly make significant, strategic changes since the country is conditioned by a much-needed agreement with the International Monetary Fund.

Analysis

Romanian Prime Minister Emil Boc resigned Feb. 6 in response to widespread social dissatisfaction over the government’s austerity measures. Also on Feb. 6, President Traian Basescu nominated Mihai Razvan Ungureanu, the former head of the Foreign Intelligence Service, as Romania’s new prime minister and requested that he form a new government. Boc, a member of the ruling Democratic Liberal Party (PDL), attempted to mollify protesters, but he stepped down after these efforts were met with little success. Basescu revealed that Boc has been losing political support within the ruling coalition for months — the prime minister and the president have been discussing Boc’s resignation since December. The PDL will now look to a different leader in its attempt to decompress social discontent, to prove it is capable of reacting to the crisis and to take the initiative away from the opposition. Ungureanu, in the meantime, has 10 days to propose a Cabinet to be voted on by the Romanian Parliament.

Thousands of Romanians have protested in Bucharest since early January against the government’s austerity measures. On Jan. 30, opposition lawmakers went on strike in an attempt to paralyze legislative activity. The situation became more delicate when PDL lawmakers openly criticized Boc’s political leadership, revealing increasing cracks within the ruling party.

Boc tried to answer public dissatisfaction by withdrawing a controversial health reform and firing his foreign minister for making derogatory comments about protesters. When these measures failed to have an impact, he lost what remained of his party’s support. The aim of the PDL now is to maintain political control of the country and to ensure its power in the long term.

The leftist opposition, led by the Social Democratic Party and the National Liberal Party (PNL), is more popular with the public and is calling for immediate general elections. However, the PDL’s majority in the current legislature gives it some ability to control when elections will happen. Since both the PDL and Basescu — who is formally an Independent but who has close ties with the PDL — want the PDL to remain in power, it is highly likely that Ungureanu’s appointment will obtain the necessary parliamentary support for ratification.

However, the PDL needs support from minor coalition partners — in particular, the ethnic Hungarian Party and the Independent Party — to secure its parliamentary majority. Were those parties to withdraw their support, the ruling party would be in serious danger.

PDL’s Strategy to Stay in Power

The PDL’s main goal is to set parliamentary elections for June 2012 — the same day as the local elections. This would allow the party to coordinate efforts with mayors who are PDL members. The goal is for mayors to join the general campaign and give their political and economic support to the national party.

Parliamentary elections were slated initially for November 2012. The PDL’s original idea involved pushing local elections back to November, but the Constitutional Court rejected this possibility because it would illegally stretch the mandate of the mayors.

The PDL then shifted its focus to pushing forward parliamentary elections. For now, Basescu announced a few hours after Boc’s resignation that new elections would be held in five months at the earliest.

Politics and the Romanian Economy

Even if the PDL fails to stay in power and parliament calls for early elections, the country’s economic situation would likely not change drastically. In 2009, Romania received a loan of 20 billion euros ($26 billion) from the International Monetary Fund (IMF). That intervention sought to maintain investor confidence, to prevent a run on the leu, Romania’s currency and to keep borrowing costs at sustainable levels. The IMF disbursed the funds on the condition that Romania implement deep cuts in government spending. Since Romania still needs financial assistance, it is highly unlikely that the opposition would break with the IMF if elected.

While some controversial reforms, such as the restructuring of the health system, have yet to be implemented, most of the difficult reforms have already been approved, and the IMF expects the Romanian economy to grow between 1 and 1.5 percent in 2012. Therefore, Stratfor does not expect the internal political shakeup to result in significant strategic shifts in Romania in the near term.

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