WEEKLY FISCAL AND POLITICAL REPORT 15 - 21 July, 2019
Prime Minister Viorica Dancila sent President Klaus Iohannis the nominations for the portfolios of domestic affairs and foreign affairs, which became vacant following the replacement of former holders this week. Nicolae Moga (PSD), member of the Romania Senat on his third term, was proposed to head the Ministry of Internal Affairs. Ramona Manescu (ALDE), a former EMP (2007 -2019) was proposed for the post of Foreign Affairs Minister. Mihai Fifor (PSD), member of the Romania Senate and general secretary of the Social Democratic Party, was proposed for the position of Deputy Prime Minister for Strategic Partnerships, currently held interim by the Minister of Justice Ana Birchall (EN) According to the new Administrative Code recently adopted by Government through Emergency Ordinance, President Klaus Iohannis has 10 days to announce whether he approves or rejects any of the nominees. He also may reject only the first nomination for a ministerial position. If the President do not respect the 10 days term, the Government may ask the Constitutional Court to settle the dispute – which may only further delay the entire process. It is possible that other ministers will be changed in the next period, once the PM will finalize the formal evaluation process of each minister activity. If President Iohannis will delay the appointment of the aforementioned nominees for the vacant ministerial portfolios, the PM/PSD leadership may decide to not dismiss other ministers until a final resolution on the current reshuffle will be reached. On a different coordinate, Alliance 2020 - USR+PLUS announced that it will support USR President Dan Barna in this November electoral race for Romania Presidency. PLUS president Dacian Ciolos, will be endorsed by the Alliance for the PM position (EN). The coming week will offer more indications on the strategy that will be followed by the main governing party, PSD, on this topic. The party leadership will nominate the social democrat candidate on Tuesday and on August 3, the decision will be validated during an extraordinary congress of the party (EN). For now, the PSD chairman and prime minister, Viorica Dancila and the mayor of Bucharest, Gabriela Firea, seem to be the main internal contenders. By announcing her intention to run for Romania presidency, despite Viorica Dancila agenda on this matter, Gabriela Firea is questioning Viorica Dancila authority in the party. The acting mayor of Bucharest may force a political rupture with the party leadership so as to position as an independent candidate (either for Romania Presidency or for a new mandate at the Bucharest City Hall). A final decision on the PSD candidate will also be made in the light of the outcome of the talks with the leaders of ALDE and Pro Romania.


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Weekly Fiscal and Politicial Report July 8 – July 14, 2019
The latest report of the Group of States against Corruption (GRECO), the Council of Europe anti-corruption body, on the progress of the anti-corruption fight in Romania, have been published. The reports conclude that Romania made little progress in implementing GRECO's previous recommendations. One of the recommendations concerns the dissolution of the Special Section for Investigating Magistrates (EN). The current government is unlikely to amend its own changes to the laws of Justice promoted in the last couple of years. However, its decision not to promote further changes will allow normalization of its dialogue with European partners. At the same time, the political opposition will be able to keep the theme of Justice on the public agenda underlining developments in recent years and introducing in their government program their cancellation after acceding to government. The Government set by Government Decision the date proposed by the Permanent Electoral Authority for holding presidential elections. The elections for Romania President will take place on November 10, Round I, and November 24, Round II (EN). Fixing the date of the presidential election increases the political pressure on the main political parties for announcing their candidates for this position. PNL will support the current president, Klaus Iohannis, in the race to get a new mandate. USR proposes its leader Dan Barna, voted party candidate at the congress this weekend. Howvever, USR and PLUS will have a joint candidate and it will have to decide if it propose Dan Barna or Dacian Ciolos (PLUS chairman and leader of the RENEW Europe group in the EP). Also, the minority governing party, ALDE, has designated its president and speaker of the Senate, Calin Popescu Tariceanu, to enter the presidential race. The main governing party, PSD, has postponed the nomination of a candidate to date. The party will have to choose between appointing a candidate or supporting the ALDE candidate. For the first time in the 30-year history of the party, it faces the risk to see its potential candidate not entering into the second round of the presidential election. One of the most important political decisions of this period concerns the promotion of a new governmental reshuffle (EN). The prime minister has completed the evaluation of the activity of eight ministries and during a session of the PSD leadership on Monday, July 15, will discuss the list of the ministries that may be reshuffled. Making a government reshuffle will allow Prime Minister Viorica Dancila to remove ministers backed by former PSD leader, Liviu Dragnea, and form his own team, rewarding those who have supported her to be elected president of the party. More clarifications on the government reshuffle will occur today following the PSD party leadership.


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WEEKLY FISCAL AND POLITICAL REPORT 1 – 7 July, 2019
The Romanian Parliament approved in this week extraordinary session the leadership of the National Bank of Romania (BNR), the members of the Fiscal Council and the new president of the National Audiovisual Council. Mugur Isarescu, the governor of the National Bank of Romania, received the support of parliamentarians for a new term in office of 5 years (the 7th consecutive term) at the helm of the institution (EN). Moreover, PSD's new elected president, Prime Minister Viorica Dancila, decided to send on this occasion a message of political strength, replacing the leader of the party political group from Romania Senate, Serban Nicolae. In the week before, he criticized Viorica Dancila's decision to announce PSD support for the BNR Governor, Mugur Isarescu. With this rapid replacement of PSD Senator leader and the 6-month party suspension for the mayor of District 3, Robert Negoita (EN), Viorica Dancila conveyed to the rest of the party's the image of an authoritative leader, deterring other party members to question in the near future her leadership/performance. The new president of the PSD’ process of strengthening her authority should be expected to continue in the next period - including in the form of a government reshuffle / restructuring, which will remain a likely scenario of evolution over the coming months.


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WEEKLY FISCAL AND POLITICAL REPORT June 23 – June 30, 2019
At the end of this week, an extraordinary Congress of the Social Democratic Party (PSD) took place. On this occasion, Viorica Dancila, interim president of the formation and prime minister of Romania, was elected by a large majority as PSD president. In the second political position as importance from the party, that of the executive president, was elected Eugen Teodorovici, the Minister of Public Finance. Mihai Fifor, the president of the PSD National Council and former Minister of Economy and later of Defense during 2017 - 2018, was elected secretary general of the Social Democratic Party (EN). The clear victory of the new leadership formula indicates that the risk of a new wave of departures from PSD departure is presently reduced in the immediate period. A relatively small number of MPs may choose to leave the party in autumn, negotiating for themselves eligible positions on other parties’ lists for the next November parliamentary elections. Once the subject of the extraordinary Congress was closed, the main subject of internal concern within PSD will be that of a government reshuffle / restructuring, which may take place in the coming weeks. It is worth stressing that the election of Eugen Teodorovich as Executive Chairman the formation, places him in the medium-term future as the main alternative at the party's presidency.


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Weekly Fiscal and Political Report 17 - 23 June 2019
The no-confidence motion against the Government did not receive the number of votes needed to be adopted in the joint plenum of the Parliament. 200 MPs voted in favor of the no-confidence motion, while the threshold for its adoption was of 233 (EN) Following the failure of the no-confidence motion, the stability of the government will no longer be questioned until September - when a new parliamentary session will start and the political opposition will be able to file a new no-confidence motion. However, changes in the current governmental formula may occur in the upcoming period. PM Viorica Dancila entered the race for PSD presidency and in order to increase her chances of being elected in this position at the PSD Congress on June 29, she will be willing to offer positions within the Government (ministerial & state secretaries’ level) to her key potential supporters. The internal expectations in the Social Democrat party regarding the removal from office of government members close to the former party president, Liviu Dragnea, creates a favorable context for Viorica Dancila in making a governmental reshuffle.


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