On Tuesday, Romania’s parliament voted down Prime Minister Ilie Bolojan’s pro-EU government in a vote of no confidence. The decision is said to threaten the country’s credit rating, access to EU funds, and the stability of its currency.

Bolojan has led a minority government since the end of April, after the left-leaning Social Democratic Party (PSD) — the largest party in parliament — demanded his resignation. PSD then left the ruling four-party coalition and joined forces with the right-wing opposition to push through the vote of no confidence.

The motion of no confidence received 281 votes, well above the 233 required to topple the government, according to the official parliamentary count.

Centrist President Nicușor Dan, who is responsible for nominating a prime minister, said he expects a new pro-EU government can be formed within a “reasonable” time. However, Bolojan’s liberal party and another coalition partner have ruled out fresh negotiations with the left-wing party.

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Currency Dropped

New elections do not seem likely, but financial markets are worried that the turmoil could make Bucharest falter in its pledge to reduce the EU’s largest budget deficit. The Romanian leu fell to a record low against the euro just before the vote.

The current coalition came to power ten months ago with the aim of stopping the rise of the far-right after a series of polarizing elections. The government had begun to reduce the deficit and narrowly avoided a downgrade from the lowest investment grade rating.

But the Social Democrats — without whom no pro-EU majority is possible — have repeatedly clashed with Bolojan. His austerity measures impact their voters and power bases, while at the same time the PSD is losing support to right-wing parties.

Nevertheless, polls show that Bolojan is the most popular politician in the sitting coalition.

“Do You Have a Plan?”

“Can anyone say how Romania is supposed to function from tomorrow? Do you have a plan?” Bolojan asked parliamentarians before the vote.

The next regular parliamentary election is not scheduled until 2028. Romania has never held a snap election, and analysts believe the likelihood is low now since the right-wing Alliance for the Union of Romanians (AUR) is leading in the polls.

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The Social Democrats have stated on several occasions that they are prepared to return to a pro-EU coalition — but under a different prime minister.

Bolojan’s party leadership reiterated after the vote that they no longer wish to cooperate with the PSD, despite some senior party members wanting to reconcile. The coalition partner Save Romania Union (USR) has also ruled out renewed cooperation with the Social Democrats.

Interim Prime Minister

“There is life after a vote of no confidence,” PSD leader Sorin Grindeanu told journalists, announcing they “want to keep largely the same coalition.” At the same time, Romanian Liberal MEP Siegfried Mureșan called the cooperation between the left and AUR “anti-European.”

“The responsibility to form a new government now lies with them,” he told Reuters.

Bolojan will continue as interim prime minister with limited powers until a new government is approved by parliament.

Romania must continue to reduce its budget deficit and carry out reforms in order to access roughly 10 billion euros in EU recovery and resilience funds before the August deadline.