(Bloomberg) -- After first distancing themselves from their recently jailed boss, Romania’s ruling Social Democrats took a page straight out of his playbook in a bid to win back support.
In her first speech as interim leader -- and with an eye on next year’s elections -- Prime Minister Viorica Dancila promised to stick with planned increases in pensions and state wages masterminded by disgraced leader Liviu Dragnea. He was sent to prison for three and a half years Monday for corruption.
“We want to move on and go back to our message and the promises we made in 2016 to get past this difficult period,” she said. “We need to get closer to the people.”
Dancila is backing away from controversial legal reforms that the European Union complained would curb judicial independence. But her spending pledges risk further widening a budget deficit that’s already near European Union limits.
“In order to improve its chances in the upcoming elections, the focus will shift again to economic populism,” according to Dan Bucsa, a London-based economist at UniCredit Bank AG. The Social Democrats could implement two large pension increases, pushing the budget shortfall to about 3.4% of gross domestic product this year and beyond 4% in 2020, he said.
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