May 6, 2025 UPDATE

A roundup of local and international news.

Newsroom, 06.05.2025, 19:47

GOVERNMENT. In Bucharest, the Liberal Deputy Prime Minister Cătălin Predoiu, who also serves as Interior Minister, was appointed interim Prime Minister, after the Social-Democrat Prime Minister Marcel Ciolacu resigned on Monday. The Social-Democratic Party decided to withdraw from the government coalition, which also includes the National Liberal Party and the Democratic Union of Ethnic Hungarians in Romania, over the poor result of the coalition’s candidate in the first round of the presidential elections. Predoiu’s interim cabinet will manage urgent affairs, but will not be able to pass legislation and emergency decrees. In the presidential runoff on 18^th of May, the ultranationalist and populist leader of the Alliance for the Union of Romanians, George Simion, will face the pro-Western independent candidate and Bucharest mayor Nicușor Dan.

OSCE. The first round of the repeat presidential election was efficiently administered, according to a report by an OSCE team that monitored the 4^th of May elections. During the election campaign, fundamental freedoms of association and assembly were observed, but the authorities’ actions to oversee online activity were not fully transparent, according to the preliminary conclusions of the OSCE observers, OSCE head of the mission, Eoghan Murphy, said. “In a notable effort, various state institutions established procedures and structures, and identified and flagged more than 450 accounts and systemic disinformation issues; however, oversight of the online environment and campaigning remained split across institutions, resulting in a fragmented response and limited transparency”. There was also insufficient information about the action taken by platforms to combat the use of inappropriate behaviour and manipulative content. The OSCE observation mission to Romania will continue to monitor the election process during the second round of the elections, on 18^th of May, and will publish a full report afterwards.

MARKETS. The political uncertainty has also has an impact on the financial markets in Romania. On the foreign exchange market, the Euro passed the 5 lei exchange rate, and the 3-month ROBOR index, which informs the establishment of the cost of consumer loans in lei with variable interest rate, rose to 6.08% per year, from 5.9% per year in the previous session, according to the National Bank of Romania. Central Bank spokesman Dan Suciu said that capital inflows have recently decreased on the foreign exchange market, while outflows have increased significantly. Consequently, in order to mitigate these effects, the Central Bank has attracted liquidity from the market, which has led to an increase in interest rates. The National Bank will seek to balance this situation, the Bank official said. Political tension has also affected the Bucharest Stock Exchange, its stock indices falling on Monday by almost 3% and continuing to stagnate on Tuesday.

GERMANY. The German Conservative leader Friedrich Merz was voted federal chancellor after a repeat of the vote in the lower chamber of the German Parliament, after the coalition government formed by the Conservatives and the Social Democrats initially failed to win a majority, Reuters reports. The new coalition aims to boost economic growth and promised to take measures to curb migration, reduce government spending, while increasing military spending and continuing to provide consistent military support for Ukraine in the war with Russia. (CM)