Here’s Why Romanian Politics Are Blowing Up Yet Again

(Bloomberg) -- No Eastern Bloc country marked the end of its communist epoch quite as decisively and brutally as Romania, where dictator Nicolae Ceausescu and his wife Elena were executed by firing squad on Christmas Day in 1989. The president’s death brought hopes of a fresh start, but Romania has been plagued ever since by corruption and revolving-door governments -- despite having joined NATO and the European Union in the interim. The latest round of political turmoil has brought down yet another government and could lead to Romania’s first-ever snap election and a new ruling coalition.

1. What’s the source of the turmoil?

Romanians had been protesting for the past two-and-a-half years against the ruling Social Democratic government. The controversy dates back to 2016, when the party, then led by Liviu Dragnea, won national elections. Dragnea was convicted the same year of trying to fix a referendum and was blocked from becoming prime minister. Instead, he ran the country from behind the scenes, allegedly instructing ministers to undermine an unprecedented anti-corruption drive that had begun to gain traction and to enact laws to shield him from prison as his legal difficulties mounted. Ultimately unsuccessful, his efforts sparked the biggest protests since communism, with crowds swelling to as many as a half-million people across the country. The Dragnea episode soured ties with the EU and drew comparisons to contemporary infringements of the rule of law in Poland and Hungary.

2. How did Romania get here?

After the end of communism, the Black Sea nation set itself on a path to democracy and a free market economy, but progress has been spotty. Romania has had 15 prime ministers during that time, with only two -- Adrian Nastase and Calin Popescu-Tariceanu -- serving their full four-year terms. Infighting has often toppled governments, including two in 2017. But there has also been a large helping of scandal. A fatal fire at a nightclub in 2015 brought down Premier Victor Ponta after it emerged that local officials had been bribed to look the other way on safety violations. The last three governments have been overshadowed by the legal and political dramas surrounding Dragnea.

3. Have there been periods of stability?

The times of least upheaval in Romania coincided with its joining the North Atlantic Treaty Organization and the EU, when politicians were focused on common aims. The drive to EU accession, achieved in 2007, was especially beneficial in helping build public institutions and civil society. Still, lingering concerns over graft -- coupled with chaotic fiscal policy -- have kept Romania out of the passport-free Schengen travel area and slowed its adoption of the euro common currency, which now looks unlikely before 2024. The country’s 20 million people haven’t been patient: Despite improving economic conditions, hundreds of thousands have emigrated west, mostly to Spain, Italy and the U.K.

4. What brought down the government?

Romania has seen off four prime ministers since the pivotal 2016 election. The latest leader was Viorica Dancila, a Social Democrat and the country’s first female premier, who took office in January 2018. After her former party boss Dragnea was convicted of abuse of office and sent to prison in May 2019, Dancila took over as party leader and started to reverse the policies he had pushed his proxies to carry out. The shift was welcomed by the EU. But her government suddenly stumbled in July when she announced plans to run for president in November elections -- a job also coveted by the leader of her junior coalition partner, who promptly took his party out of the government, causing Dancila to lose her parliamentary majority. She lost a confidence motion brought by opponents on Oct. 10.

5. Where do things go from here?

Dancila’s political future hangs in the balance. Romania is gearing up for the November 10 presidential contest, in which Dancila faces off against incumbent president Klaus Iohannis, who has managed to get his close Liberal Party ally Ludovic Orban installed as the new prime minister. The minority government headed by Orban is faced with ensuring a smooth transition until the next general elections in 2020.

6. What else might happen?

Some political parties and even Iohannis have argued for snap elections months sooner than planned. Were that to occur, it would be the first early parliamentary vote in Romania’s post-communist history. Polls show the Liberals in the lead, with the center-left Social Democrats and an upstart center-right party vying for second place. Until then, the new minority government may have a hard time pushing legislation through a divided parliament where Dancila’s Social Democrats remain a powerful force by retaining close to half the seats.

7. What’s at stake for Romania’s economy?

Despite all the political chaos, Romania has largely prospered in the past three decades, especially in the years before and after the 2008 global financial crisis. Incomes have risen as vibrant technology and auto-making sectors fuel one of the EU’s fastest-growing economies. But generous tax cuts and public-sector pay rises pushed by Dragnea -- aimed at keeping voters onside -- have taken their toll on the budget and curbed domestic and foreign investment.

The Reference Shelf

  • Bloomberg News: The demise of Romania’s most powerful politician.
  • Despite years of tackling graft, Romania remains one of most corrupt countries in Europe, according to Transparency International.
  • The last days of former dictator Nicolae Ceausescu, as reported by state television TVR.
  • A Radio Free Europe/Radio Liberty photo essay on Romania then and now.
  • Bloomberg Opinion’s Leonid Bershidsky says Eastern Europe isn’t as gloomy as it seems.

©2019 Bloomberg L.P.

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