Lora Indjova, Nova News, May 7, 2026
Table of Contents
Summary
Here is a summary of the main points from the interview given by Vladimir Mitev to Nova News regarding the political and economic situation in Romania following the fall of the Bolojan cabinet.
The political crisis
- The fall of the Bolojan cabinet is the result of a no-confidence vote (281 votes “for,” compared to the 233 needed to pass the motion).
- The crisis was triggered by the Social Democrats’ withdrawal from the four-party governing coalition.
- The main reasons are complex: dissatisfaction with severe economic measures (freezing of wages and pensions), conflicts over resource distribution, and plans for the partial privatization of state-owned companies.
Economic situation
- Inflation: Approximately 10% in the first quarter of the year, on an annual basis.
- Currency: The Romanian leu is depreciating sharply (from 5.09 to 5.26 lei per euro over the course of a week).
- Budget deficit: Among the highest in the EU.
- Positive signs: Despite the technical recession, Romania is maintaining stable levels of public investment (31 billion euros in infrastructure) and attracting significant foreign capital (8.1 billion euros).
Political outlook
- The president’s role: Informal and formal consultations are forthcoming. The president has the right to propose a new prime minister, and it is likely that an apolitical, technocratic figure will be sought to stabilize the situation.
- Forecasts: Early elections are considered unlikely due to the lack of such a political culture and the risk of destabilizing financial markets.
- Bolojan’s future: He is expected to remain a political force as the leader of the pro-reformist faction, despite polarized opinions regarding his administration.
Conclusion
Romania finds itself at the crossroads of political instability and financial tensions. The main challenge for the next government will be striking a balance between the fiscal discipline demanded by the markets and the population’s growing social demands.
Interview
Lora Indjova: A day ago, the Romanian Parliament dismissed the Bolojan cabinet through a no-confidence motion. The government fell after 281 deputies voted against it – far more than the 233 votes required. This situation arose after the largest party, the Social Democrats, left the four-party coalition and, together with the opposition, called for a no-confidence vote. Although early elections seem unlikely, there are fears that Bucharest might abandon its commitment to reduce the largest budget deficit in the European Union. Reuters reports that the country is now risking its access to European funds and the stability of its currency. Since yesterday, we’ve been discussing with economists the fact that the leu is depreciating, and this is already being felt. Our colleague, journalist Vladimir Mitev, is live with us to go into more detail. Hello, Mr. Mitev.
Vladimir Mitev: Hello.
First, tell us how the Bolojan cabinet’s fall came about? What were the underlying factors – was it entirely the country’s financial and economic situation, or something else? We’ve commented several times that, in recent months, Romania hasn’t been in a very rosy situation – so to speak. Wage freezes, pension freezes, inflation… What’s going on? Tell us.
The reasons, in my opinion, are complex. Of course, there is a certain dissatisfaction regarding the fact that people are paying a price for the austerity measures that have been introduced. Many people feel that this price is disproportionate. That is, the people who are more vulnerable – for example, wage earners – are paying more, while certain groups considered privileged, linked to the business community or even the judicial system, are paying a lower price. In addition, there is a conflict over resources, which may be the reason we have ended up in this situation.
Ever since the war in Iran began and this fuel crisis emerged, causing prices to rise, this division between the Social Democrats and the right-wing parties in the coalition has become apparent. Recently, there were plans to list minority stakes in various state-owned companies on the Bucharest Stock Exchange. This appears to have sparked greater resistance, as, on the one hand, supporters of this privatization argued that it would make the companies more transparent and modernize them. Additionally, it would bring financial resources to the state. Meanwhile, opponents of these actions argued that the state would lose resources, noting that while it is true the state currently receives substantial income from these companies’ dividends, selling the shares would mean it would no longer receive those dividends.
What lies ahead from here on out, if we continue in this direction? And, in general, what does Romania’s financial situation look like? We talk very often about Romania and what is happening there.
Yes, when we talk about Romania, we often look at indicators such as inflation or the budget deficit, which are somewhat concerning. Inflation, if I’m not mistaken, for the first quarter of this year is about 10% on an annual basis. The budget deficit is supposed to be 6.2% this year – let’s see if they manage it; so far, it’s going well; for the first quarter, it’s only 1% of GDP. But there’s something else that’s rarely discussed, namely that there continue to be massive investments in Romania, which, in my opinion, is…
It exists!
Let’s say this is the trump card the government in Bucharest is counting on. For example, I found information indicating that public investments – such as in infrastructure, highways, roads, etc. – totaled 31 billion euros last year. On the other hand, the large inflow of foreign direct investment continues – 8.1 billion euros last year. In other words, in a way, Romania is banking on the fact that economic activity isn’t contracting that much. There is indeed a technical recession, but, in a way, the economy is holding steady at more or less the same level. Although there is a decline in consumption, it is investments that are making up for it. Perhaps this is what anyone who comes to power is hoping for.
And perhaps this is where we see an argument for dismissing the Bolojan cabinet – that, to a certain extent, even supporters of the reforms have come to believe that perhaps these strict austerity measures are too drastic, too severe, and that some relaxation might actually be better for the population, since, after all, the population has its own expectations.
Yes, and at the same time I read that there is also an increase in the tax burden; the state apparatus is indeed bloated. In general, there are quite serious disturbances, which certainly did not help the Bolojan cabinet continue to govern, or at least that is how it appears. There were supporters of his yesterday, as far as I understand, during the debate on this motion of no confidence. Now everything is in the president’s hands, and he can propose a prime minister and entrust him with forming a government. However, if that candidate is not approved by parliament, the procedure can be repeated until the president decides to dissolve the legislature – though he is not, in fact, obligated to do so. This is a very interesting detail. Do you think we are approaching a full-blown political crisis – not just a bad financial situation, but a political crisis in Romania?
From what is being said, it is clear that this political crisis – triggered by the search for a new balance among the various forces – will last at least a few weeks. And the president himself has said that he will first hold informal discussions with the various parties and only then proceed to formal talks. In other words, he is allowing some time for these processes to unfold. What will happen after that? Of course, everyone says it’s uncertain and they can’t make predictions – it’s very unpredictable – but still, it seems to me that Romania doesn’t have a culture of early elections.
Furthermore, I find it unlikely that the sovereignist AUR party will come to power, because the markets (including credit markets), on which Romania depends, will not view this positively at all. That is, I expect rather that Romania – which relies both on these foreign investments and on the fact that its own stock market has developed significantly in recent years thanks to funds from abroad and the West – will not want to rock its own boat and political elite so much. I’m betting instead that there will be some understanding within part of the coalition, at least the part that has governed so far.
But when it comes to Bolojan – since you mentioned his name – more and more voices are saying that he could, in some form, either through the National Liberal Party or as a separate party, lead a political movement that will be pro-reformist. Because he simply has that kind of image – there are people who firmly believe that he was the one who tried, as they say, to break the status quo, to change things in the country. So, he has supporters, but also many opponents, who believe that he punished, as I mentioned, people without resources. But he also has supporters.
And I expect things to move in that direction. On the one hand, the president does indeed play an important role in this institution – Cotroceni Palace, the presidential palace. That is, the president will likely appoint as prime minister a figure who is a technocrat and, in a way, apolitical, or, if from a party, who enjoys the approval of a broader circle of institutions and parties. I expect that, in a way, the crisis will be resolved this way, but perhaps it will take time, as these are complex processes. This crisis has been going on for some time, and trends in Romanian politics seem to be aligning slowly. Unfortunately, as you mentioned, the leu is depreciating. It reached 5.26 lei per euro yesterday, whereas just a week ago it was at 5.09.
What does this mean for people? How are people living right now?
It means that inflation is rising, and incomes aren’t keeping pace. I also mentioned that public sector wages are frozen, so people are losing their purchasing power. In my opinion, it’s logical to expect discontent. This is the other problem – that, in addition to the political crisis, there is also an economic or financial one, linked to the fact that the interest rates at which Romania borrows to finance its debts have once again begun to reach high levels. And in this regard, we will have to hurry to find a formula that provides new stability, because it is precisely stability that is viewed positively by the markets.
We’re following what’s happening in Romania. You’re talking about high inflation. Can you give us a figure, as a percentage, to wrap up the discussion?
I think I mentioned – if I’m not mistaken – that for the first three months it’s about 10% on an annual base.
About 10%… certainly not a negligible rate of inflation. Thank you, Mr. Mitev, for joining us on our program. It is important to pay attention to what is happening around us, and for this reason, we decided to take a look this morning, dear viewers, thanks to our colleague Vladimir Mitev, at our neighboring country, Romania – to see what the situation is like there. Indeed, we have mentioned Romania quite often in recent months regarding the freezing of wages and pensions, as well as the sudden upheavals that, obviously, do not bring positive outcomes or approval for those in power. We discussed the situation in Romania following the fall of the Bolojan cabinet after a vote of no confidence. What comes next – we will continue to follow.
Photo: (source: YouTube)
Subscribe to the channel of the blog “The Bridge of Friendship” in YouTube, where a number of video and audio interviews are published! The blog can also be followed in Facebook and Twitter. Its Telegram channel is here. And here is its Substack account.
About Author
Discover more from The Bridge of Friendship
Subscribe to get the latest posts sent to your email.
