How will the new Romanian government impact the EU?

Against the background of rising nationalism in many Member States, the 7th largest EU member and the fastest growing EU economy in 2016 (5.2%), Romania, held its parliamentary elections this Sunday. The Social-Democrats (S&D) won by a landslide, taking advantage of the fragmentation and lack of a clear message by the center-right camp.

While no proper anti-EU party made it into the new Parliament, nationalistic sentiments do exist within the ranks of the winning party and the elections’ results do indicate a shift in the policies of Bucharest’s next government, which is more likely to play hard ball in Brussels than the outgoing one.

Importantly, the new Romanian government will oversee the final stage of the Brexit negotiations, as Bucharest will hold the EU presidency in early 2019, exactly when the EU-UK talks will reach the critical stage.

Unlike other Central and Eastern European Countries, such as the Visegrad group (Poland, Hungary, Czechia and Slovakia), Romania has consistently shown support for the EU integration until now. In fact, Eurobarometer surveys find that Romanian citizens are the most enthusiastic about the EU among all 28 member states, even though their support has shrunk during the past few years following the economic crisis. Moreover, given that Bulgaria has just elected a not so EU-enthusiastic president and that the Baltics experience unprecedented turbulence (at least in their post-communist history), Romania remains the strongest EU-friendly outpost in the region. However, latest developments show that this can no longer be taken for granted.

This analysis looks into the likely composition and orientations of the future Romanian government following Sunday’s elections.

The Social Democrats (PSD) have made a remarkable comeback after being ousted from power one year ago amid mass protests. They gained 46% of the votes and will be able to form a governing majority together with the small ALDE party (founded by former Prime Minister Tariceanu). This leaves no room for maneuver to the country’s President Iohannis, but to appoint a Social-Democratic prime-minister, despite his own center-right background. Iohannis would have hoped to be able to build a parliamentary majority around the current technocratic PM Dacian Ciolos, which is a former EU commissioner who enjoys great popularity in the country. However, Ciolos’ backers, PNL (National Liberal Party – EPP), and the political start-up USR (Save Romania Union) performed rather poorly, gathering a combined score of just around 30%. The movement of former president Traian Basescu, the PMP (People’s Movement Party), has also narrowly passed the 5% threshold to become a parliamentary party.

How is this relevant to the EU?

PSD is still to announce their proposal for the prime-minister post, as internal factions have different views on the matter. However, what is relevant from the EU’s perspective is that this party won the elections with a rhetoric that encourages Romanians to take their fate into their own hands, or, in other words, not leave it to be decided by the EU. Although PSD’s leader Liviu Dragnea tried to reassure EU and US partners immediately after the result of the elections was announced that Romania will continue to fulfill its commitments to the West, the views in his own party are split. Nationalism and nostalgia for the perceived “good old times” (pre-1989) characterizes an important part of its electorate, as well as some of its party elites, and it remains to be seen which faction will gain more traction in the next government.

Importantly, the developments in Bucharest will be relevant for the Brexit negotiations, as this government will oversee the last stage of the EU-UK negotiations from the Council Presidency seat in early 2019.

How did Romanian politicians see the EU so far?

With a language that is part of the romance family, Romania is an important player in an increasingly troubled region. It owns the biggest port to the Black Sea, Constanta, which is in the immediate proximity of both Crimea and Turkey. Just as Poland and the Baltics, Romania hosts US troops on its soil, which has made its relations with Moscow more difficult. Over the past 15 years, the commitment to the European and euro-Atlantic integration processes has been consensual among the main centrist political parties. More recently, its pro-Western liberal democracy agenda had been reinforced following the election of German ethnic Klaus Iohannis as president in 2014.

An analysis of the votes of Romanian Members of the European Parliament on key issues highlights that Romania is one of the most pro-US / pro-TTIP European countries and one of the biggest supporters of the creation of a European Defence Union. Romanian political elites also strongly back a tougher stance on Russia, as well as European economic integration. In these cases, even the socialist Romanians agreed, which is different than in other countries such as Bulgaria, Hungary, but also France or Italy, whose Socialists are much more Russia-friendly and less EU and US-enthusiastic than the Romanians. On another note, Romanians have shown more flexibility with regard to the acceptance of the mechanism of relocation of refugees, compared to Poland or Hungary, even though the subject did generate some controversy in the country.



What will change in relation to the EU?

It is worth noticing that, in the case of Romania, it is the President who attends EU Council summits, which means that the center-right will not lose, in theory, a seat at the table. However, President Iohannis’ room for maneuver in Europe will be substantially limited by the heavy leftist parliamentary majority.

After the crushing victory obtained on Sunday, the Romanian social-democrats will have much bigger leverage and the “inward-looking” faction of the party will try to push the government to be substantially more assertive in relation to its European partners. Among others, the new government wants to cut corporate tax (despite its social-democratic name) and increase the public spending beyond the limits agreed at the EU level, in order to cover wage increases and new investments. This would put additional pressure on the core EU member states and, importantly, will weaken support for initiatives such as tax harmonisation and European economic governance.

On the longer run, if the EU fails to deliver a concrete plan for integration that would allow Romania to play an important role, one can expect the rise of anti-EU sentiment which would allow other international actors to play a stronger role on its fast-growing investments and business scene.

Also read: Top 10 most influential Romanian MEPs.

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