Internal Affairs

simple motion was registered on Monday at the Senate, under the title “ PNL Government – Your Name is Austerity “.In accordance with Senate procedure, the motion will be debated Monday. The motion may yet pass since PSD still has a majority in the Senate. The majority is thin, though, and there is a chance the motion fails. Should the motion pass on Monday, PSD will call again for the resignation of the Minister for Public Finance.

Currently, PSD is divided internally and dissensions exist between the former ruling body and the current one. Viorica Dăncilă no longer commands authority, and no one person is really in charge, although Marcel Ciolacu holds the President function temporarily, there is strong division along the party lines. A failure to unite and vote on the motion will further weaken the party’s position and will erode their unity, which is barely maintained until the February party meeting. If this is the case, there may not be enough cohesion to block certain projects of the PNL government, such as modifications to GEO 114/2018, the laws on justice or the Special Section for the Investigation of Abuses in the Justice Field.

External Affairs

With the December 12th elections fast approaching in the UK, there are signs that EU member countries will refuse to adhere to the 11-month timeline Boris Johnson has touted for a post-Brexit trade deal. With the new EU Commission starting work on a delayed timetable partly because of the UK’s failure to nominate a commissioner, things are not looking up for such a negotiation. Currently, the polls place conservatives in an 11-point lead over their Labour counterparts. A clear win for the Conservatives will likely mean Brexit by the 31st of January, as Boris Johnson announce previously, however it is still unclear if they will be able to fill all the 326 needed for a majority. Since Sinn Fein does not take up seats in Parliament, a working majority will be determined by the number of seats they win.

Fiscal and Economic Updates

On November 29th, 2019, PM Ludovic Orban announced that a draft for the modification of GEO 114/2018 is in the works. The draft will repeal most of the articles in the GEO, as previously stated. Before Christmas, it is possible that the taxes specified in the ordinance for banking assets and for energy companies will be repealed via the assumption of responsibility by the Government. This is also a likely scenario for other laws passed when PSD held power and will likely result in PSD calling for a no-confidence vote in February, as was previously stated by prominent leaders from the party.

Furthermore, Ludovic Orban also announced that the 2020 budget must be adopted before the end of the year. Consequently, even though it is still unclear how the minimum wage will increase, the PM is confident that adopting the budget until New Year is still a possibility. If not b, it will most likely be adopted in early January 2020.

Finally, a further depreciation of the RON compared to the main currencies has occurred, even though it is now at RON 4,77 for EUR 1, better than the previous week. In this case, a new depreciation will probably occur in January, especially if the budget is not out by the beginning of the month.

 

Issue Monitoring