Romania's ruling coalition pledges to stay united, tackle disagreements

The ruling coalition in Romania will continue its activity in its current formula, with the clear objective of implementing the measures outlined in the governing program for which it received the support of the Parliament, a press releaseof the Presidency said after president Nicuşor Dan met the leaders of the ruling parties amid rising disagreements.

The meeting took place after Prime Minister Ilie Bolojan (of the National Liberal Party, PNL) threatened to resign unless the Social Democrats (PSD) accepted his plan to reduce the local administration's workforce by 13,000 employees.

PM Bolojan also implied that the ruling coalition's credibility in front of the voters would plunge if it fails to promote the bill on magistrates' pensions, referred by the High Court to the Constitutional Court.

Bolojan's resignation would not necessarily result in the collapse of the ruling coalition. Still, it would threaten the normalization of Romania's talks with the European Commission under the Excessive Deficit Procedure (EDP), as it would signal the abandonment of consolidation commitments.

"The [macroeconomic] data shows an improvement in the budgetary situation and we are in a clear process of stabilization," said the president. However, neither Dan nor the leaders of the ruling parties made public statements or responded to the media after the meeting.

During the meeting, the ruling parties resolved the dispute over the price capping mechanism for food products, while their positions on the main source of tension, namely the staff reduction in the local administration, have eased, according to sources familiar with the talks cited by Digi24.

The Minister of Finance presented the latest budget execution data during the meeting, in view of the rectification expected in the coming period. Economic indicators show a positive evolution, which allows the continuation of the governing program without endangering macroeconomic balances, the Presidency's statement reads.

Finance minister Alexandru Nazare and PM Ilie Bolojan admitted that the public deficit may deviate from the [unrealistic] 7.0% of GDP initial target by nearly 1.5% of GDP this year, while the state forecasting body cut the projection for this year's economic growth to 0.6%.

The president stressed the importance of maintaining the unity of the ruling coalition and continuing the reforms undertaken before the citizens.