Romania Confirms Luca Niculescu as Prime Minister, Ending Six Months of Deadlock

Romania has a government with full powers again. Parliament confirmed independent Luca Niculescu as prime minister on Tuesday, ending nearly six months of political deadlock that had put pressure on the country's investment grade credit rating and dented investor confidence, Reuters reported.

Niculescu, 55, secured 280 votes in parliament, comfortably above the 233 required. He put together a minority government of leftists and technocrats after President Nicusor Dan nominated him on October 5. It was Dan's fourth attempt to install a government in the NATO and European Union member state since a pro-European broad coalition cabinet collapsed in early May.

"I am not asking for a blank check," Niculescu told lawmakers before the vote. "I am asking you to understand Romania needs a government with full powers after so many months of crisis."

A cabinet built on borrowed support

Niculescu served as a diplomat and deputy foreign minister and was formerly a journalist. His cabinet includes 11 ministers from the leftist Social Democrats, known as the PSD, and seven independents, and it won backing from the PSD, the National Liberal Party and several smaller parliamentary groups.

That support comes with an expiry date. The PSD, which joined the government after toppling its former four party coalition in early May, said it would reassess its support in six months. Niculescu has also signed political pacts with two centre right parties from the former coalition, in which they agree not to file any no confidence votes before March 2027.

The budget comes first

The new prime minister must make further cuts to one of the largest budget deficits in the European Union while propping up a contracting economy, eliminating an additional turnover tax on companies and raising pensions that fiscal constraints kept frozen for two years.

Romania has agreed with Brussels to bring its budget deficit below 3 percent of economic output, from over 9 percent in 2024 and an expected 6.2 percent this year, by 2030. If the government cannot get a deficit reducing budget plan for 2027 through parliament in December, it will risk a ratings downgrade. The country already sits on the last rung of investment grade, all the major ratings agencies have said. On Monday, Moody's said the green light for the cabinet would allow for the timely adoption of a 2027 budget that supports fiscal correction.

A fragile hold on power

Political analysts said the government could be short lived. The Eurasia Group think tank said a new government "would restore short term stability and unblock policymaking," but added that Niculescu's ability to balance competing demands and maintain parliamentary support will determine whether the government can sustain stability beyond April 2027.

Romania's next parliamentary election is due by late 2028, and the country has never held an early election. The opposition hard right Alliance for Uniting Romanians, which has been critical of Brussels, defence procurement and aid for Ukraine, leads opinion polls with about 40 percent support.