Romania’s political scene in elections year - more stability, less democracy

• Social Democrats and Liberals rule with about 60% of MPs in unusual alliance since Nov 2021
• This alliance demobilized many voters, annoyed numerous regional leaders of both parties
• Despite a strong majority, major reforms are delayed, fiscal consolidation is weak
• PSD-PNL mostly dealt with crises, increasing influence over main state institutions and media
• PSD, PNL run together only in EU election, but new alliance is very likely after general election
• Opposition is weak, Rightwing Alliance has potential to rise in case of high turnout in election

A peculiar alliance between Romania's two major parties has been governing since November 2021. The historical left/right rivalry was paused for ending what seemed to be an-impossible-to-solve governmental crisis. After a couple of months of not very transparent negotiations to align ruling strategies, the National Liberal Party (PNL) shook hands with its main political enemy, the Social Democratic Party (PSD), to muster a solid majority in the parliament for government support. The PNL was in a ruling alliance with the progressive, anti-corruption promoter, the Union for Saving Romania (USR), but the partnership did not last, due to divergent views regarding reform implementation pace and anti-corruption fight. The PNL could continue ruling with a stable cabinet only in an alliance with the PSD, but few have thought this was possible. They tried this once in the past and won together the 2012 general election, but they broke up after less than two years.

The PSD and PNL had about 60% of parliament seats, so they did not need anyone else in their alliance grounded on a PM rotation system. Yet, they welcomed the Democratic Union of Hungarians in Romania (UDMR) beside them, probably to soften the negative impact of their alliance on voters with the idea that most politicians in Romania joined forces to end a serious governmental crisis. Not surprisingly, the two major parties soon realized that they could rule comfortably without the UDMR's 6% and expelled it from the cabinet when the PM rotation was made. Besides, a third wheel in the relationship makes power and influence sharing more difficult. We should also mention that any ruling party or alliance can always count on the support of the 4% of MPs representing national minorities. Therefore, a solid parliamentary support was secured, with or without the UDMR, to pass structural and long-delayed reforms, and even negotiate important legislation that needed larger backing, like administrative reorganization of the country or revising the Constitution. But none of those actually happened.

What really seems to have happened was a gradual taking over of all main state institutions under their influence. We've seen no major corruption investigations started or concluded by the anti-corruption body (DNA), while the integrity agency (ANI) has been silent in the past two years. Though we doubt that big corruption vanished in Romania and all politicians suddenly live in full integrity. The Constitutional Court (CCR) rulings on opposition challenges have been almost all in favour of the government or politicians at power. Yet, we have reasonable reservations that the entire passed legislation was perfectly constitutional, especially when complying with the fiscal responsibility laws. The PSD and PNL took care of media as well. Some investigations of the barely existent opposition media revealed that the ruling parties have increased significantly spending with unmarked propaganda.

Equally important, this alliance between the PSD and PNL agreed by their top leaders infuriated voters and ignited internal conflicts because not all have accepted it. The Liberals suffered the most, polls indicating a more severe popularity deterioration than in the PSD case. The PNL was actually torn apart, after several influential members and MPs defected to set up a new party headed by former PNL leader Ludovic Orban, the Rightwing Force.

Basically, constant bickering around different views on ruling strategy, permanent negotiations of positions and influence, settling internal conflicts and dealing with various crises caused by the energy prices, inflation, and the war in Ukraine, left little time for reforms. Consequences are visible: fiscal consolidation has failed thus far, and the EC disbursed with delay the second tranche from Romania's allocation in the EU's Recovery and Resilience Facility. The third is delayed too, and this one has the toughest conditionalities in terms of structural reforms.

PSD and PNL - partners at rule, competitors in elections

PSD and PNL representatives and leaders are often questioned about the future of this alliance and participation in this year's elections. We should note that Romania holds all four elections this year: EU parliament, local, presidential and general. Responses are similar, both claiming that they will be competitors in local, general and presidential elections, with own candidates. However, nothing is set in stone and they proved they can change minds overnight. What is certain is that they will run together in the EU election, even though there is no official explanation for this decision. We can assume though that party leaders probably want to avoid taking responsibility for weak results, especially in the PNL case. So, if they run together and the result is unsatisfactory, they could blame each other. The PSD-PNL coalition now controls about 58% of parliamentary seats, but it is highly unlikely to muster a similar score by running together in the EU election, we think. They could though reach around 40%, which might secure more than 30 seats in the European Parliament.

The government also decided to merge the local and EU-parliament elections, to save money and increase turnout in the EU ballot. However, we believe there are other reasons behind this. Holding local with EU elections simultaneously advantages PSD and PNL because they have strong regional structures and influential regional leaders that could mobilize the electorate to vote for the coalition in the EU election as well. This consolidation could be illegal, though, and the opposition challenged it at CCR. Local election should have taken place in September and by moving it to June, it generates situations in which the current regional leader is not re-elected, while the newly elected one has to wait three months for taking over. Regional leaders were not pleased with this decision because it will be their job to convince voters to accept a list with candidates that includes names from the opponent party.

Opposition is weak and fragmented; anti-system parties are losing support

Three parties in the opposition decided to form an electoral alliance (the United Rightwing Alliance - ADU) for this year elections: the USR, Orban's Rightwing Force and the PMP (Popular Movement Party, set up by former president Traian Basescu). Since it was recently announced, it was included only in a few polls that indicate its support at about 10-15%. The USR entered the parliament at the previous election with 17% of seats, but it now has only 13% due to MPs resignations. Orban's party might gather very angered Liberal voters, but it has little name recognition nationwide and no regional structures, so we see marginal contribution to the alliance in terms of electorate. The PMP has a core electorate of about 5% and missed entering the parliament at the 2020 elections by a few hundred votes.

The USR started as an anti-system party, with a solid anti-corruption and reformist manifesto, very appealing mostly for right-wing voters. It reached a popularity peak at the EU election in 2019, when it grabbed more than 22% of votes. Yet, internal conflicts, leadership stubbornness and inflexibility in political negotiations affected its image. Voters had big expectations from the USR once in power in alliance with the PNL, but it could not do a lot due to its more powerful and experienced partner, so it disappointed the electorate. In addition, the fight with corruption is no longer a hot topic of debate while people are more worried about inflation, military conflicts and are generally reluctant to reforms.

The other part of the opposition includes the nationalist and extremist parties. The Alliance for Uniting Romanians (AUR) made a surprising entrance on the local political scene in the local election in 2020. The party had little name recognition in big cities, it initially gathered supporters from smaller towns and villages, people that could be easily manipulated with conspiracy theories. Obviously, it was the proper time for that since it was the first pandemic year. The AUR later on continued to rapidly gain support with a very noisy and sometimes aggressive attitude against the political class and the system. Yet, like in the USR case, that was not enough for voters and after realizing that nothing was actually materialized in their benefit, people became uninterested in scandals and noise. This is reflected in the falling support trend that the AUR faces lately. Another one is SOS Romania, founded by a former AUR member, Diana Sosoaca. The party ousted her for being too vocal, so she made her own party, which does not have many members. Yet, it was rapidly gaining support among the numerous angered voters, particularly in the last part of 2023. She is constantly stirring noisy scandals in the parliament, fighting all politicians and disagreeing with all, while often expressing anti-NATO and anti-EU views. Like AUR, Sosoaca is on falling support trend, due to the same reasons.

PSD-PNL coalition is likely to continue ruling after this year's elections

To conclude, the most probable scenario is that the PSD and PNL will win all elections this year. A feeble opposition, extremist parties on falling support trend and prospects of low turnout in all ballots set proper grounds for the two big parties to keep the helm. They will very likely make a new alliance after the general election, as party representatives frequently say. Their main concern is probably if they could both muster a majority in the next parliament, for remaining in power without another partner. This scenario has a more than 50% probability, we think. Yet, if the right-wing opposition manages to mobilize voters and turnout increases considerably, that probability decreases and the PSD-PNL coalition will have to reopen talks with the UDMR. Another possible scenario, with 25% chances of happening in our view, is that the PSD-PNL cannot reach a majority even with the UDMR and the minorities. In such a case, the ADU will perhaps have enough to try to make a majority with the PNL.