By Luiza Ilie
BUCHAREST (Reuters) – Romania’s grand coalition government will survive at least until a 2024 general election despite policy differences, and use its parliamentary majority to carry out long-term reforms, one of its leaders said on Wednesday.
The three-month-old government controls roughly 70% of seats in the legislature, but the leftist Social Democrats and centrist Liberals – former rivals – disagree over tax plans, wage and pension hikes as well as the scope of support measures for surging energy bills.
Markets, ratings agencies and international observers have expressed doubts the coalition will be long-lived, extending a pattern of quick changes at the top.
The country has had 10 prime ministers in the last 10 years.
Marcel Ciolacu, parliament’s lower house speaker and the leader of the Social Democrats, Romania’s largest party, said the coalition’s sizeable majority would help to tackle overlapping health, energy and economic crises.
“When you have such a majority you must also aim to do daring things,” he told Reuters in an interview. “I think this governing coalition will function until 2024 and … I think it has a future after 2024 with the same structure.”
“You can’t do things in just three years. Romania must return to political stability.”
Ciolacu said the government will extend an energy support scheme of price caps and subsidies for households and small companies after it expires in March, dismissing a previous proposal to cut value added tax for electricity prices from April.
“If the prices remain capped, why lower VAT?” he said.
The central bank has estimated inflation, which rose to its highest in over a decade in January, will reach double-digits in April after the scheme ended.
Ciolacu also said Romania needs to invest in new power production and become energy-independent within three years. He also said parliament will approve changes to an offshore tax that has stymied Black Sea gas projects.
The tax is the last remnant of a series of energy sector restrictions introduced by the Social Democrats in a previous cabinet in 2018.
“I am firmly convinced we will find the correct solution … for the Romanian state in terms of taxation and for investors to make these projects, definitely in this parliamentary session, it is one of the priorities.”
(Editing by Barbara Lewis)
