Romania is bracing for new political turbulence as Prime Minister Ilie Bolojan is set to defy the largest ruling party's call for his resignation in a standoff that could lead to the collapse of the ruling alliance, Bloomberg reports, writes UNN.
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The Social Democrats intend to withdraw their support for the prime minister later on Monday in internal consultations due to what they call Bolojan's austerity approach and poor coordination within the four-party coalition.
The prime minister, who leads the junior Liberal Party, has already vowed to remain in office regardless of the vote's outcome. If he follows through on his commitment, it could prompt the Social Democrats to file or support a no-confidence motion against him in the coming weeks.
This clash raises the likelihood of the pro-European ruling coalition, which emerged 10 months ago after the worst political crisis in over three decades, caused by an unprecedented decision to annul the results of the presidential elections, falling apart.
The new turmoil is likely to alarm investors and rating agencies. They have warned that political stability is crucial to supporting the country's efforts to reduce the largest budget deficit in the EU and avoid a downgrade to junk status.
Romania is already paying the highest interest rates on loans among its regional competitors, and dollar-denominated bonds were the worst performers in emerging markets on Friday due to increased political risk.
Social Democratic leader Sorin Grindeanu intensified the pressure on Friday.
"From Monday, we will have a new political reality," he said at a press conference. "We will determine our own path forward, and if that path leads to opposition, then so be it."
The loss of Social Democratic support would leave Bolojan without a parliamentary majority, forcing him to choose between continuing with a minority government, moving into opposition, or supporting another prime ministerial candidate to rebuild the alliance.
If Social Democratic ministers resign from his cabinet, the prime minister will have 45 days to seek a vote of confidence from parliament. He will still retain all powers during this period, after appointing interim officials to vacant positions.
Bolojan hinted in a radio interview on Friday that he is prepared to lead a minority government if the constitution allows it, or until he loses a no-confidence vote. He said his Liberal Party would refuse to form another coalition with the Social Democrats in its current format.
"I am not a fan of minority governments, but Romania has had them before," Bolojan said. "Parliamentary mathematics do not leave us too many options, and forming a majority is not easy."