Year in Review: Politics

With the EU parliamentary elections in May and the presidential election in November, Romania has had a turbulent political year in 2014. The economy has fully felt the effect of this and the business environment is now looking forward to what should be a stable and more predictable year. However, recent political developments hint at more turmoil to come.

Simona Bazavan

“The campaign is over and now we need to begin work,” president-elect Klaus Iohannis, head of the National Liberal Party (PNL), the main opposition party, told Romanians in his victory speech on November 16.

The 55-year-old former physics teacher, who had served as mayor of Sibiu since 2000, had just won an unexpected victory against Victor Ponta, Romania’s PM and head of the ruling Social Democrat Party (PSD). The appointment will become official on December 21 when he will be sworn in, replacing Traian Basescu who has held the position for two consecutive terms.

Ponta had initially started the campaign as favorite, even leading some of the exit polls released after the second round of voting. An ethnic-German and an Evangelical Lutheran in a largely Orthodox Christian country, Iohannis was perceived by some as uncharismatic by Bucharest political standards.

Despite the PSD’s nationalistic campaign and religious attacks on his opponent, Iohannis managed to score important points due to public dissatisfaction with the government, and an overall disillusionment with local politicians. He promised Romanians he would be a different kind of president promoting a different way of doing politics, and that this will lead to a different kind of Romania, one of “things done properly”. His message gained momentum in the last two weeks of the campaign – especially via social media – after anger over the way the government had organized the voting process for citizens abroad erupted into street protests across the country. Thousands of Romanians waited in line for hours to vote in polling stations across Europe with many unable to cast their ballot by the time polling stations closed. The government failed to remedy the situation by the second round of elections, blaming the queues on the unexpected turnout.

Back home the turnout was unexpectedly high as well – approximately 62 percent, the highest level since 1996.

In the end Iohannis won by an unexpected and comfortable 54.5 percent of all votes, meaning that he beat Ponta by approximately one million votes. What should be noted is that even without the votes obtained outside Romania – where he won by a staggering 89.7 percent of the 379,000 cast votes – he would still have defeated his opponent.

Clinging to power

Soon after conceding defeat to his opponent on the night of November 16 following the second round of elections, Ponta stated that he saw no reason to resign as PM.

Given that the PSD and its allies hold the majority in Parliament and the next parliamentary elections will take place in 2016, Ponta could indeed maintain his position. However, by the end of November the ruling coalition had suffered its first loss after the UDMR, a Romanian ethnic Hungarian party, said it would leave government. Alongside the Conservative Party (PC), the National Union for Romania’s Progress (UNPR) and the Liberal Progressive Party (PLR), the PSD still maintained a 60 percent majority in parliament, but opposition leaders suggested that this could well change.

“Everybody wants to be on the winning side. So, it is possible that during the coming weeks or months we will see changes in Parliament,” said Iohannis at the end of November.

With more PMs abandoning the ruling coalition by the end of the year, Ponta’s government is looking at an uncertain future in 2015.

“So it’s possible that during 2015 we will have this shift which could give the PNL a majority, which it would then use to change the government,” the president-elect told Reuters.

Moreover, Ponta faces uncertainty within his own party next year. In the PSD’s first official meeting after its defeat, it was decided that a party congress to elect new leadership would be held in March. Following the same meeting, three preeminent party members – Mircea Geoana, the PSD’s losing presidential candidate in the 2009 elections and former party president; Marian Vanghelie, mayor of Bucharest’s Fifth District; and Dan Sova, a former party spokesperson – were ousted for their public opposition to the party’s leadership.

Scandal erupted soon after, with many analysts attributing this to what they called the PM’s desperate cling to power and the party’s dire need for internal reform.

By early December, Ponta had gone back on his pledge to resign after the National Anticorruption Directorate (DNA) took over the investigation into the irregularities reported during the voting process in the diaspora.

“Should the DNA start a criminal investigation against me, against Titus Corlatean (e.n. former external affairs minister) I will definitely resign,” the PM had said, according to Mediafax.

Ponta conceded that the elections were “poorly organized” outside Romania but said that it was all an “unintended error” and not a premeditated attempt to undermine voting abroad.

The government’s priorities for 2015

By the end of November the most pressing matter on the government’s agenda was drafting the 2015 state budget and having it passed by Parliament. The PM had also announced plans for a government reshuffle. Calin Popescu Tariceanu, president of the Romanian Senate and head of the PLR, said in early December that the 2015 state budget would be adopted by Parliament by December 20 and that the government reshuffle should normally follow.

“We’ve already discussed the schedule for activities related to the budget, meaning negotiations between the government and the International Monetary Fund (IMF) and then sending the draft to the Parliament. (…) We’ve set a target to finish these proceedings by December 20,′′ he stated.

Tariceanu’s statement came after the delegate minister for the budget, Darius Valcov, said on November 26 that the budget would be completed by the end of November and should be sent to Parliament on December 10.

Further delays are expected after it was revealed in early December that the negotiations with the IMF and the European Commission (EC) had turned tense. The two institutions had allegedly asked the Romanian government to push to reduce the deficit to 0.9 percent of GDP in 2015, a demand which local authorities called unacceptable, according to Mediafax.

As for plans to reshuffle the government, the new cabinet is due to be announced by December 20 as well. The UNPR, PC and PLR, which has recently joined the ruling coalition, are expected to get two seats each and the rest will be appointed by the PSD. The new government will see not only new ministers but some new ministries as well, according to media reports.

Regardless of who gets which brief or whether Ponta resigns, the new government will have a hard job next year. After a turbulent 2014, the business community is hoping for some much needed stability and predictability and for a shift of attention towards the local economy.

There will be no tax increases in 2015, promised Ponta, and there is even talk about cutting VAT on some products. By what means this could be achieved while still meeting the deficit target and allocating money to investments remains unclear. Debate has yet to reach this level as local politicians remain more concerned about scrambling for position in the aftermath of the elections and less about the economy.

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