We have government: political crisis ends, budget gap remains

After more than five months of an interim administration and four designated prime ministers, we finally have a fully empowered government. Yesterday, the Luca Niculescu cabinet received a vote of investiture from the full Parliament, passing with 280 votes in favor and 58 against. Subsequently, the members of the Government took their oaths of office at Cotroceni Palace and held their first meeting, during which they approved the new structure of the Executive.

The investiture of the Luca Niculescu government addresses a key requirement highlighted in reports by rating agencies Standard & Poor's, Fitch, and Moody's namely, the need to avoid a downgrade of the sovereign rating to "junk" status (not recommended for investors) by the beginning of next year. This requirement entails having an Executive capable of taking the decisions necessary to restore public finances.

A positive signal arrived yesterday from Moody's, which noted that the installation of the new Government and the timely approval of the 2027 budget would support fiscal consolidation, according to a statement from the Ministry of Finance. However, this outlook is contingent upon the actions of the new Cabinet; it is not a "clean bill of health" granted in advance. Beyond ending the institutional deadlock, the return of the PSD to the heart of government brings back to the forefront the cyclical nature of Romanian politics: following administrations led by the right or arrangements where the PNL and PSD shared power the Social Democrats return, offering social measures and promising to restore purchasing power. Their governing program, featuring the indexation of pensions by 2027, support for vulnerable groups, and a commitment to a new public-sector wage law, also provides the political tools to secure the loyalty of their electorate. While social needs are indeed real, it remains to be seen whether the promises addressing them are backed by sustainable revenue, or if they represent yet another round of spending deferred to the future.

Otherwise, there is a risk that a familiar scenario will repeat itself: the Social Democrats take on the role of those who increase pensions, promise higher wages, and expand budget expenditures; then, once the state coffers can no longer sustain these commitments, they leave government, shifting the burden of adjustment onto their successors. The right then steps in with budget cuts and tax hikes affecting both citizens and the business sector justifying these measures as necessary to correct imbalances. In this logic, the alternation of power becomes a convenient division of roles: one side distributes benefits and reaps the votes, while the other bears the political cost of austerity all the while, the taxpayer foots the bill for the entire cycle.

• PSD supports the Niculescu Cabinet; zero votes from AUR

Parliamentary debates during the investiture vote were heated-not because of the individual holding the office of Prime Minister, but due to the 12 ministerial portfolios held by the PSD and the governing program, which as the new Minister of Economy, Daniel Zamfir, noted is largely derived from the Social Democrats' own governing platform.

Sorin Grindeanu, President of the Chamber of Deputies and leader of the PSD, stated from the parliamentary rostrum: "I have some good news to start with: the Bolojan government is on its way out! However, the bill for his administration remains on the table for the Romanian people. Today, we must decide whether to leave the country trapped in crisis in the chaos created by the right or commit to leading it out. The PSD has chosen responsibility. We are voting for the Niculescu government today because Romania needs a change in direction. But let this be clear: we will not manage the failure of the Bolojan administration and the right; instead, we will expose it publicly from day one. That is my commitment to you."

He accused the PNL which remained in power for seven years despite never having won an election of consistently driving up the budget deficit. He further blamed the USR for the bankruptcy of the Damen Mangalia Shipyard, as well as for issues at Romaero, the SAFE program, and various other state-owned enterprises. At the same time, he called on the PNL to cast a responsible vote. The PSD president has requested that the new prime minister conduct an audit to determine which invoices were left unpaid or had their payments delayed by the former Bolojan government.

Meanwhile, George Simion, the leader of AUR, stated that his party's lawmakers would not cast a single vote in favor of the new government.

George Simion remarked: "I don't think this comes as any surprise. You know full well how many votes you'll get from AUR for this new puppet government: the same number you received for the previous ones,zero! We are not traitors, contrary to what others might claim,but we will not be participating. I call upon those lawmakers who have a backbone, including those from the PNL, not to tarnish yourselves by voting for this government, which will only continue to impoverish the population. Remain loyal to those who elected you: the Romanian people. For five months, you've been pretending to quarrel; you broke off your alliance, yet today you end up voting side by side. What you are doing here today It's a betrayal. You take turns in government and fool the public into believing you've broken the alliance. "Are you going to come to us to sign motions of no confidence you, who today will vote for this government?"

• Ilie Bolojan: "Apart from Siegfried Mureşan, the other three nominations for Prime Minister-designate were merely the personal choices of President Nicuşor Dan"

Former Prime Minister Ilie Bolojan, president of the PNL, did not hold back in his response to the accusations leveled by the leaders of the Social Democrats (PSD) and the AUR party: "More than five months have passed since the PSD and AUR irresponsibly dismissed a government that was striving to put Romania back on track, yet they have failed to offer any viable solution. Of the four nominations put forward by President Nicuşor Dan, only one, that of Siegfried Mureşan, reflected the political will of the parties. The others were simply the President's own choices. Essential public services are at risk of ceasing to function, and hospital emergency departments may soon be unable to admit patients. Today, the PNL will cast a "vote of necessity', a vote aimed at ending this crisis. We are not joining the government, nor are we seeking any positions; our sole objective is to ensure that Romania continues on its current path. (...) The PSD is already concocting a narrative about a "difficult legacy' a convenient excuse to mask their own inability to fulfill promises that were never backed by substance. Let this be clear: there is no such "difficult legacy'; the government has been stabilized. The Romanian people have paid a price to correct existing imbalances. Have the decency not to undo what has already been set right. Whoever leads the government is accountable for their actions there is no place to hide. The list of ministers is not ours." I know some of the members of the government. At the Ministry of Labor, we have a minister who kept the salary law tucked away in a drawer lacking the courage to bring it forward because it proposed increases amounting to tens of billions of lei-and as a result, we lost 770 million euros from the NRRP (National Recovery and Resilience Plan). At the Ministry of Health, we have a minister who has done nothing to address structural problems. At the Ministry of Justice, there is a minister who spent dozens of pages explaining to me why the draft law on magistrates' pensions was unconstitutional, yet lacked the courage to actually initiate it. You have no chance, Mr. Luca Niculescu, of solving these structural problems. And what do you intend to do about the fiefdom Mr. Grindeanu has built at the Ministry of Transport?” For his part, Radu Miruţă, a USR deputy and former Minister of the Economy and of National Defens, responded to some of Sorin Grindeanu's accusations: "The problem with this government is the "PSD-ization' of state institutions, institutions you look upon with such longing. Since 1990, you have been part of 18 different governments and have produced 11 prime ministers. The figures speak for themselves: five million Romanians have left the country, and factories have been shuttered and left in ruins all because you shifted the label from "Made in Romania' to "Made by the PSD.' Mr. Grindeanu, a PSD whose leaders are caught with bribe money in their car trunks; a PSD whose ministers fly in private jets under questionable circumstances; a PSD whose leader travels on private planes paid for by the company Nordis, a firm that took money from Romanians without ever delivering the apartments they had contracted for cannot be a party that claims to have solutions. I must admit that you are actually doing us a favor us at the USR, that is. You are doing us a favor because we can use you in the public sphere as a point of comparison. While you have obsessively shut everything down simply because you couldn't exert control over a given institution we at the USR have shown that things can be done differently. We demonstrated that, in just a few months, we could revitalize and bring back to life five factories-at Pirochim Victoria, Sadu, Cugir, Mangalia, and Mediaş-which had previously fallen into disrepair due to PSD policies. Furthermore, we implemented the largest equipment procurement program in the history of the Romanian Armed Forces." "7,000 new service members have joined the ranks of the Romanian Armed Forces. We implemented rigorous performance indicators for the leadership of state-owned enterprises and demonstrated a simple truth: that the state can be managed without being treated as the private property of a political party. That is why USR bothers you, Mr. Grindeanu. That is why you pay television stations to relentlessly smear USR ministers with falsehoods. It is because we have set the bar too high for the standards and priorities of the PSD a party whose vocabulary is limited to: bribes, cronyism, and as many backroom deals as possible. USR will not vote for this government.”

• UDMR - a vote of convenience for a single-party government

Kelemen Hunor, the president of the UDMR, called for calm following the heated statements mentioned above and drew attention to the crises currently facing the country: "We are going to vote for a government backed by a circumstantial majority - a majority born of necessity -which will bring an end to a crisis that has dragged on for far too long. We are voting for a single-party government that lacks a stable majority. With this investiture vote, the governmental crisis comes to an end; however, the budgetary and economic crises persist, a social crisis is looming, the energy crisis has taken its toll on Romanian businesses, and the polarization of society is evident. All these challenges demand solutions. People expect solutions from us. The UDMR has signed a political agreement with the Prime Minister-designate. Dialogue will be necessary for every draft law, for every government ordinance. Politics means compromise. Beyond compromise lies chaos. Those of us entering the opposition have a responsibility. We must offer a rational alternative. This may well be the last chance for a democratic Romania.”

In the same vein, Varujan Pambuccian, leader of the parliamentary group representing national minorities (comprising 19 deputies), stated: "I had hoped for this to be a day of peace; it is not. I would like it to be a day of armistice and perhaps it might be. Because the needs of ordinary people are more important than the political games, infighting, and backroom deals of the political class.”

Representatives of SOS România stated that they would not vote for the Niculescu government, while parliamentarians from UPR and PACE - Întâi România announced that they would support the proposed cabinet.

Petrişor Peiu, leader of the AUR senators' group, declared: "The Luca Niculescu government is supposedly going to reform state-owned enterprises, yet the Prime Minister-designate's own brother held a position at a state-owned company, despite having no qualifications for it. The primary party within this government tells us: "Everything up to now has been bad,' yet they propose a government that retains the very same Minister of Finance who made all those decisions. Mr. Bolojan claims the Minister of Justice was poor and the Minister of Labor is "awful', yet he intends to vote for them anyway. Kelemen Hunor took the floor to speak about AUR, but AUR has never been in government.” Oana Ţoiu, a former minister and a member of parliament for the USR, stated: "Hearing Mr. Grindeanu claim he will lead Romania out of the crisis is like seeing an arsonist show up at your door with a bucket of water to put out a fire while, to make matters worse, he still has the matches in his pocket. This is the last time the PSD will be handed the reins of government as a gift. The PSD has no way of holding onto power from here on out; this is their last chance. Even the PSD itself never expected this to happen, especially after losing half its votes during the Dragnea and Ciolacu eras. This past year, people have seen what a true governing partner looks like what fair recruitment entails, and what it means to throw the doors wide open. The USR's goal is to mitigate, as much as we can, the harm the PSD will cause, and to work with our partners to build an alternative." At the conclusion of the debates, Prime Minister Luca Niculescu stated: "Some remarks may be a bit too sharp for a diplomat, but even among us, behind closed doors, discussions can get heated. The Romanians watching us today are not looking for another round of political sparring. Many labels were applied today; it is easy to label others. I am not a politician, and I will not join this carousel of biting retorts. In me, you will always find a partner for dialogue. Criticism, concerns, and debates are natural, but the difference is that we will not respond with more rhetoric; we will respond with action. I am not asking for a blank check; I am asking you to understand that, after five months, after so many months of crisis,Romania needs a fully empowered government.”

He noted that, starting today, the Government "will immediately set to work on addressing urgent matters: a budget revision without increasing the deficit, the adoption of the 2027 budget, energy security for the winter, and the successful, loss-free conclusion of the National Recovery and Resilience Plan (NRRP).”

Beyond the exchange of accusations, the debates made it clear that the PSD has taken on the task of governing under the leadership of technocrat Prime Minister Luca Niculescu, while the PNL and UDMR, without joining the Executive, emphasized the need to bring the crisis to an end. For the new government, securing its investiture marks the completion of an initial phase. Next come the two budget revisions announced by Finance Minister Alexandru Nazare, the negotiation of each individual measure, and the challenge of passing the public budget for 2027 a process in which social promises must be reconciled with the obligation to reduce the deficit. Prime Minister Luca Niculescu's call for dialogue will be tested precisely by the parties' ability to transform a vote cast out of necessity into support for difficult decisions.