Internal affairs

As with most allies of necessity, PNL and USR are currently at odds over local elections. USR has begun requesting that the Government must either assume responsibility or pass an emergency government ordinance on the subject of two-turn local elections. This is a strong contention point for PSD as well, who advised that if the Government intercedes with election law, they will have to call for a no-confidence vote. The fact of the matter is that PSD is not currently well-positioned to do so. With a number of  ”lost colleagues” coming back on board, some invitations to former members such as Mihai Tudose to come back as well as a weakening Pro Romania (a group resignation was signed this week), PSD is slowly lumbering towards cohesion, but it is far from there yet and the threat of a no-confidence vote does not seem an all too real one for the time being. In fact, after the Government assumed responsibility for the justice laws, PSD could have triggered a no-confidence vote, but they did not. Instead, they chose the route by the Constitutional Court, which does not test their parliamentary majority.

With the shifts in the right-wing electorate, however, PNL can now no longer feel confident that two-turn elections will favour them most and not USR or PLUS, and defeating PSD is no longer the most important motivator for the alliance, but the retention of power is. With that in mind and with the fact that Marcel Ciolacu keeps touting the no-confidence vote scenario, but also keeps finding new ways to avoid it, it can safely be concluded that at least until February, a no-confidence vote will not be held, thus PNL refuses to grant the request of their allies. It will again hold true for the budget for 2020, which is unlikely to be contested too much in Parliament. It is possible that an extraordinary session will be held between Christmas and New Year to approve the budget.

External Affairs

With a 358 to 234 vote on Boris Johnson’s EU Withdrawal Agreement Bill was approved by the House of Commons, along with the timetable which was cause for concern for the previous MPs. As such, the United Kingdom will leave the European Union on January 31st, after the bill will be further debated on the 7th, 8th and 9th of January, after Christmas recess.

According to the bill, what follows are some years of the UK having to pay the EU considerable amounts under the “divorce bill”, establishing a customs and regulatory border between Northern Ireland and Great Britain and having to come up with a trade deal before the end of 2020. The Government will have 11 months, starting with February 1st, to get all the necessary policies in place to replace what was once EU law.

Fiscal and Economic Updates

According to the draft bill for the budget for 2020, several changes are to occur. First, the minimum wage will be increased by 7,2%, from RON 2080 to RON 2230. The target deficit is 3,58% and the estimated economic growth will be 4,1%. The increase of the minimum wage will put further pressure on the budget and the target deficit, without any cutback in costs seems very optimistic. According to Ludovic Orban, he has the party’s support for assuming responsibility for the budget. This will likely not have been necessary, but now there is little time to pass the budget under the regular parliamentary procedure, therefore it is possible that the Government will assume responsibility on the 23rd of December, as stated. This will lead to the budget being adopted before the end of the year, with PSD being able to do little to nothing to stop this at this time.

 

Issue Monitoring