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CEE: ROMANIA: Ciolacu Poised To Stay On As PM After Pro-EU Parties Reach Deal

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News wires report that Romanian pro-EU parties reached an accord on the formation of a new government, which will see Prime Minister Marcel Ciolacu stay in office, while the new ruling coalition will support Crin Antonescu in the upcoming presidential election.

  • Ciolacu told reporters that pro-EU parties "have a political agreement that is a precursor to a governing coalition and a parliamentary majority," as he announced the outcome of talks between his Social Democratic Party (PSD), National Liberal Party (PNL), the Democratic Alliance of Hungarians in Romania (UDMR), as well as representatives of other ethnic minorities.
  • It should be noted that the UDMR has had close ties with Hungarian Prime Minister Viktor Orban and his Fidesz party, although it remained part of the European People's Party (EPP) even after Fidesz's ouster.
  • PNL's acting leader Ilie Bolojan said that the three parties agreed to support ex-PNL leader Crin Antonescu as their joint candidate in the upcoming re-run of the presidential election. Bolojan had earlier said that the election would likely be held either just before or just after Easter.
  • Despite relying on a narrow parliamentary majority, the new administration will face a difficult task of curbing its fiscal deficits. Fitch recently warned that it could cut Romania's credit rating to junk amid heightened political uncertainty.
  • Our EM credit team flags that the political crisis has exerted significant pressure on ROMANI 5.75 Mar35 USD benchmark, which  @ z+320bp has widened some 70bp since its launch earlier in September. Whilst political uncertainty has triggered the recent sell-off, prudent and sustainable fiscal policy remains a key factor driving spreads long term.
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News wires report that Romanian pro-EU parties reached an accord on the formation of a new government, which will see Prime Minister Marcel Ciolacu stay in office, while the new ruling coalition will support Crin Antonescu in the upcoming presidential election.

  • Ciolacu told reporters that pro-EU parties "have a political agreement that is a precursor to a governing coalition and a parliamentary majority," as he announced the outcome of talks between his Social Democratic Party (PSD), National Liberal Party (PNL), the Democratic Alliance of Hungarians in Romania (UDMR), as well as representatives of other ethnic minorities.
  • It should be noted that the UDMR has had close ties with Hungarian Prime Minister Viktor Orban and his Fidesz party, although it remained part of the European People's Party (EPP) even after Fidesz's ouster.
  • PNL's acting leader Ilie Bolojan said that the three parties agreed to support ex-PNL leader Crin Antonescu as their joint candidate in the upcoming re-run of the presidential election. Bolojan had earlier said that the election would likely be held either just before or just after Easter.
  • Despite relying on a narrow parliamentary majority, the new administration will face a difficult task of curbing its fiscal deficits. Fitch recently warned that it could cut Romania's credit rating to junk amid heightened political uncertainty.
  • Our EM credit team flags that the political crisis has exerted significant pressure on ROMANI 5.75 Mar35 USD benchmark, which  @ z+320bp has widened some 70bp since its launch earlier in September. Whilst political uncertainty has triggered the recent sell-off, prudent and sustainable fiscal policy remains a key factor driving spreads long term.