Outlook for 2009 -10
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THE ECONOMIST INTELLIGENCE UNIT |
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JOAN HOEY
Senior Analyst, Central and Eastern Europe
THE ECONOMIST INTELLIGENCE UNIT
Political outlook
Domestic politics
The coalition government of the Democratic Liberal Party (DLP) and the alliance of the Social Democratic Party (SDP) and the Conservative Party (CP) has a strong working majority across the two parliamentary chambers, of 329 to 142. Headed by Emil Boc of the DLP, it has the support of the president, Traian Basescu, a former leader of the Democratic Party (DP), a forerunner of the DLP. Mr. Basescu continues to play a high-profile role in day-to-day policy and has clashed with the leader of the SDP, Mircea Geoana. The contest for the presidency, for which an election is due in late 2009, will pit the two parties against one another and will strain relations. Mr. Geoana has indicated that he will nominate a new prime minister if he wins the presidential election. However, recent opinion polls suggest that Mr. Basescu would win a narrow victory in a second-round run-off for the presidency, if, as expected, he decides to stand for a second term.
The government's majority should mean that policies agreed by the cabinet pass through parliament. However, the need to take unpopular measures to deal with the economic crisis makes it likely that the government will suffer from disagreements and bouts of instability. It will preside over negative growth, rising unemployment and falling consumption. This could make it extremely unpopular with voters very quickly and will increase the risk of social unrest. The European Parliament election held in June indicated a sharp fall in popular support for the three main parties: the SDP, DLP and the opposition National Liberal Party (NLP). The Hungarian Democratic Union in Romania (HDUR) increased its share of the vote, and there were significant gains for the ultra-nationalist Greater Romania Party (GRP). The possibility of a new election within two years, or the formation of a new coalition following the presidential election (or both) cannot be ruled out.
The implications of the European Parliament election result
The results of the election to the European Parliament held on June 7th revealed waning support for the governing coalition of the Democratic Liberal Party (DLP) and the alliance of the Social Democratic Party (SDP) and the Conservative Party (CP). The Hungarian Democratic Union in Romania (HDUR) and the ultra-nationalist Greater Romania Party (GRP) made significant gains on a substantially reduced turnout of only 27.6%, down from the 39.2% recorded at the parliamentary election held in November 2008.
The SDP-CP alliance, with 31.1% of the vote, won a slender victory over the DLP, with 29.7%. Only 2.9 mn voters (17% of the electorate) voted for members of the governing coalition, compared with 4.5 mn in November. Support for the former governing National Liberal Party (NLP) fell from 18.7% at the time of the parliamentary election to 14.5%. The HDUR maintained its level of support from the parliamentary election and increased its share of the vote from 6.3% to 8.9%.
The far right is the main winner
The party that made the greatest gains in the election was the ultra-nationalist GRP, which increased its share of the vote from 3.4% in the parliamentary election to 8.7%. This gain reflected the de facto absorption into the GRP of the Christian Democrat-New Generation Party (CD-PNG), whose leader, Gigi Becali, was elected as a GRP candidate. As a result, the GRP will send three members to the European Parliament, including two of the most flamboyant characters on the Romanian political scene, Mr. Becali and the leader of the GRP, Corneliu Vadim Tudor.
The import of the vote for the presidential election, expected in December 2009, was confused by the candidature of the president's daughter, Elena Basescu, who stood as an independent and won 4.2% of the total vote. Subsequent opinion polls indicated that 36% of the electorate would vote for the incumbent president, Traian Basescu, in the presidential election. Around 24% would support Mircea Geoana, the leader of the SDP, and 19% would support Crin Antonescu, the new leader of the NLP. Mr. Tudor would be supported by 11% of the electorate and 5% would support Prince Radu, the son-in-law of the former King Michael. Polls also indicated that Mr. Basescu would win a narrow victory, of around 52% to 48%, in a second-round run-off against either Mr. Geoana or Mr. Antonescu.
Mr. Basescu has said that he will decide whether to stand for a second term of the presidency in September and added that his decision will depend on the scale of the economic downturn and the level of unemployment. The prime minister, Emil Boc, would be the most probable candidate for the DLP if Mr. Basescu decided not to stand. However, the European election and opinion polls indicate that he is more likely to be blamed for a continuing deterioration in economic performance than Mr. Basescu, and would face enormous problems in winning the presidency. This would make it a high-risk strategy for Mr. Basescu to decline to stand, as the probable outcome would be the election of Mr. Geoana as president and the formation of a new government. However, this would not include the GRP, which is not represented in the current parliament; the GRP could, however, make significant gains in the event of a new parliamentary election.
OPINII
