Description: Romanian President Nicusor Dan, nominated his advisor, Eugen Tomac, as interim Prime Minister in an apparent attempt to stem the political crisis. Romania’s Parliament collapsed after an unlikely alliance between the Social Democrats (PSD) and the Alliance for Uniting Romanians (AUR) ouster former Prime Minister Ilie Bolojan. Tomac would have 10 days to form a government of technocrats and survive a no confidence vote if he is expected to bring forward the much necessary budgetary reforms. Romania risks losing EUR 8.6 billion in recovery funds by the end of Aug if concise budget plan is not formalized.
Impact: Tomac is unlikely to have the political capital and the confidence of the technocratic interim government in Romania, especially after the PSD’s and AUR’s political alliance. The political power grab in Romania is likely to continue in the short to mid – term, unless Tomac manages to secure enough majority in Parliament to survive the no – confidence vote. After the no confidence vote, Tomac would be put under scrutiny to propose a comprehensive budgetary measures which would highly likely be contested. Unless some form of an immediate political comprise is reached with Romania’s highest legislative body, the country is currently on a path to lose EU’s recovery funds which would in turn significantly downsize its economic prospects in the mid – term and decrease appeal for foreign investors.