At the end of July, Romanian President Traian Băsescu survived a national referendum on his dismissal, initiated by Prime Minister Victor Ponta. Clara Volintiru looks at the lead-up to the current political conflict in Romania, and finds few reasons to be optimistic. Even as all sides now claim victory, further political turmoil may have severe ramifications for Romania’s economy.

As events unfolded in Romania, since the street protests of the beginning of the year, it became clearer and clearer that the problems in this country had no easy fix. With each apparent occasion to resolve the political crisis—Emil Boc’s resignation as Prime Minister in February, Mihai Răzvan Ungureanu’s “technocratic” government that followed, Victor Ponta’s coalition government which succeeded Ungureanu, this spring’s local elections confirming the opposition’s momentum, July’s referendum for the dismissal of President

Romanian Prime Minister Victor Ponta Credit: Alberto Novi (Creative Commons BY NC SA)

Traian Basescu, the invalidation of this referendum by the Constitutional Court, the situation not only didn’t improve, it got progressively worse. With each turn, the political crisis contaminated other dimensions of the governing process, making it much harder to discern the true nature of these problems—economical, social, or political.

What is the root of this political conflict that has incapacitated Romania for the past 8 months? Numerous analysts have pointed to the austerity measures implemented by the unpopular Emil Boc government (Boc II 2008-2012). Still, things inRomaniaaren’t always what they seem, especially in terms of politics. The austerity measures are at the root of the current turmoil, though not by themselves, but by being perceived as unjust and inequitable. The recent pension reform was passed fraudulently when the Speaker of the Parliament, Roberta Anastase, claimed a quorum for the vote, even though this had not been achieved. Fiscal measures have targeted start-ups and small businesses, but have left the big party clientèle widely untouched. Not to mention the reform of the health system aimed at restructuring its most effective service: the emergency rescue service (SMURD)—which triggered this winter’s popular unrest.

All the while, Romania’s shadow economy (estimated at €32.2 billion in 2011, the second largest in Europeas a percentage of GDP—29.6%), continued to flourish, often with the involvement and protection of state officials. The fight against corruption delivered some resounding blows at high levels, but left the system of preferential resource distribution in place. Mr. Ungureanu’s government was impeached after allocating governmental funds in a discretionary manner—95.15% to its ruling coalition parties. According to a Flash Eurobarometer notice Romanians have a generally negative perception about the last five years, believing that the shortcomings of the judicial system and the level of corruption have deteriorated. In a country whose experience with patrimonialistic rule left the population suspicious and distrustful of its leaders, the rumors about the vast personal wealth of the president’s family and his closest collaborators didn’t help either.

Romania’s imbroglio  has much to do with its lack of institutionalisation of the party system as a whole, and its political parties. The institutionalisation of the party system is problematic on the account of the shallow attachments between voters and parties. A widespread disenchantment with political leaders left the electoral process struggling with decreasing turnout, electoral volatility and opportunistic voting behaviour—vote-buying. On this background, the survival of president Basescu based on a technicality (voter turnout was only 46.24% instead of the necessary 50% +1) will further the population’s detachment from the political arena. The fact that more than 7 million Romanians (88.75%) voted for his impeachment now, while only 5 million voted for him in the 2009 presidential elections, shows just how unrepresentative he has become. While his hold on power is legal, he is no longer legitimated by the popular will. The antagonizing cohabitation with the current government will further discredit the administrative process. The political conflict is nothing new forRomania, and it wouldn’t be such an incapacitating problem, if it weren’t for the current perilous economic ramifications, with the national currency significantly depreciating given the perceived instability in this country.

What should we expect in terms of public policy from the government of the social democrat Victor Ponta, a close disciple of the former Prime Minister Adrian Nastase? Under the leftist government of Nastase, the values of the at-risk-of-poverty indicator were close to the EU average, but during the center-right cabinets of Popescu-Tăriceanu (2005-2008) and Boc (2009-2012) they have increased significantly (surpassing EU averages), with more than one fifth of the population currently being considered at-risk-of-poverty. The Gini values for inequality and income quintile ratio forRomaniaalso show a similar dynamic, with the lowest values recorded while the social democrats were in power and gradual increases afterwards. The peak was reached in 2007, when the 20% of the population with the highest equivalised disposable income received almost 8 times as much income as the 20% of the population with the lowest disposable income.

These indicators could suggest that one focus of the current government will be to counter income inequalities that have become pervasive in Romania. Indeed, Ponta cabinet’s policy is focused on stimulating employment and economic growth. Its plan to restore pensions and public wages to the 2010 levels (when they were cut by 25% by the Boc II cabinet) was accepted by the IMF with whomRomaniacurrently has a stand-by-agreement, besides the 2009 bailout.  But, it is uncertain what will Mr. Ponta succeed in accomplishing by the time of the next legislative elections in November, while fending off the internal political struggles. Additionally, the deputy Prime Minister and Minister of Finances—Florin Georgescu is also the deputy governor of the National Bank of Romania, so he is likely to follow the cautionary fiscal path, clamping down on populist expenditures.

The current coalition championed by Prime Minister Ponta is equally under scrutiny from the international community preoccupied with the precipitated manner in which he chose to proceed in resolving the highly divisive status quo of cohabitation with president Basescu. From the part of the EU and theUnited Statesmany concerns have been voiced about perceived intrusions into the judicial process. Beneath the concerns about upholding the rule of law, there is also the preoccupation with vested interested in security (the proposed anti-ballistic missile programme, military bases etc.) and other international relations issues, for which president Basescu has been a very compliant partner. Mr. Basescu proved he has close allies in neighboringHungaryas well, as besides the declared boycott to the referendum by the PD-L,Hungary’s Prime Minister Viktor Orban also encouraged the ethnic Hungarians to abstain from voting, and consequently, Harghita and Covasna counties reported the lowest turnout.

Summing it up, who won the referendum? As with most of the latest Romanian elections—all sides claim victory. President Basescu if obviously victorious for surviving the referendum, at the cost of popular legitimacy. Prime Minister Ponta is victorious for obtaining control of most of the state’s institutions, at the cost of his personal credibility. Mr. Antonescu, the leader of the National Liberal Party (PNL) proved himself credible in his interim position, but it is uncertain whether he will ever be an elected president. Thus, all were victorious, but the costs were much too great in terms of the people’s trust in their governing institutions, the democratic process and the political solutions. This general disenchantment will only prolong the current blockage, making them all Pyrrhic victories.

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Note:  This article gives the views of the author, and not the position of EUROPP – European Politics and Policy, nor of the London School of Economics.

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About the author

Clara Volintiru – LSE Government
Clara Volintiru is a PhD candidate in the Government Department at the London School of Economics and Political Science (LSE). She holds an MSc in Comparative Politics, also from the LSE, an MBA from CNAM, and an undergraduate degree in economics. Her thesis is focused on political parties in new democracies, but her research activity has also covered topics from the wider area of political economy as well as conflict studies.

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