Internal Affairs

The PSD Conundrum

While the Senate motion against the Minister of Public Finance, Florin Cîțu, passed without a hitch on Monday, PSD is currently experiencing a leadership crisis. Marcel Ciolacu, the interim president of the party has now publicly admitted that allowing Viorica Dăncilă to run for President was a mistake. With the former standing bureau now dissolute, PSD is struggling, as Ciolacu puts it, with a task ahead to “rebuild the social democratic party”.

Currently, according to him, an alliance with Pro Romania is still an option, for the future elections. Mihai Tudose can still join the party, while Adrian Țuțuianu has already confirmed he will not be returning. Sorin Grindeanu is also welcome, should he choose to return. At the moment, it is still unclear what the next standing bureau will look like. The Congress scheduled for February will put the matter to rest, however, there will likely be internal struggles for position and power, with Gabriela Firea, a relative newcomer to the party, having announced she will run for President of the Bucharest branch of PSD. Thus, we are looking at a long congress in February, up until which PSD will likely not take any major action against the Orban government and will try to maintain the lines it has to this point drawn.

No-Confidence Vote

The idea of a no-confidence vote has been touted by the interim president of PSD, Marcel Ciolacu, for a few weeks, in regards to different matters. As it stands right now, according to him, a no-confidence vote will be called if the assets of CEC Bank are sold to private parties or if the Government will choose to go with an assumption of responsibility for draft laws which are currently still being debated by Parliament. That being said, a no-confidence vote will likely not happen until late February, with PSD still reeling from the last no-confidence vote that took down the majority government and from the defeat in the Presidential elections.

Assumption of Responsibility

The Government has assumed responsibility currently for three major draft laws: the modifications to the justice laws, pertaining to the early retirement of magistrates, access to the National Institute of Magistracy and the three-judge panels; the second major draft is that of cross-county transportation and the third one is the one regarding budgetary ceilings for 2020. Since PSD cannot stop this with a no-confidence vote, because of the disarray they are currently in, the Government will likely pass the budget law for 2020 next week.

Snap Elections

Calls for snap elections were again heard, along with the President stating he wants to have mayors elected in two turns. While PM Ludovic Orban stated he would also like snap elections, this does not benefit PNL, with sympathy for USR PLUS on the rise among the electorate on the right. Therefore,  we will likely have elections on term, especially after PSD consolidates its position after the February CEx.

European Affairs

A stunning Conservative victory in the December 12th UK General Elections has provided Boris Johnson with a comfortable majority in the Hosue of Commons, to stick to his January 31st Brexit deadline. Labour is left reeling with a little over 200 seats in the House, and will probably continue to fight Johnson over the Brexit deal, to no avail.

As far as migration is concerned, which was one of the key points for Romanians in the UK, Boris Johnson plans to implement a point system to divide future migrants into three tiers, with an entry for Tier 1 – high-skill labourers and temporary schemes for Tier 3 – low-skill or unskilled labourers. His deal will probably continue unabated on the 31st of January.

Economic and Fiscal Updates

Following the assumption of responsibility by the Government for the budget ceilings, PM Ludovic Orban will likely present the parameters in which the budget was built on Tuesday and will send the project to Parliament on Wednesday. It is yet unclear what to expect for pensions or salaries, however, the Ministry for Public Finance has made it clear that no new taxes are to be expected in 2020, that the budgetary deficit will likely stand at around 3,6% and that the excise tax for fuel will drop.

The tax on bank assets will also be removed, according to the Minister for Public Finance, as well as the capital requirements for private pension fund managers. However, according to the minister, a week before the Parliament goes on vacation, we may see a third budgetary adjustment, due to the Micula brothers case.


Issue Monitoring