The Social Democratic Party (PSD) in Romania has decided not to return to government coalition meetings, highlighting ongoing tensions over the management of projects funded by the National Recovery and Resilience Plan (PNRR) and the "Anghel Saligny" agreement. This decision followed a leadership meeting on Monday, where they expressed dissatisfaction with the government's functioning, particularly concerning a draft emergency ordinance that suspends certain unstarted or low-progress projects.

These tensions arose after the USR opposed a national day of mourning for former President Ion Iliescu, prompting PSD leaders to boycott coalition meetings. Despite their non-participation in meetings, PSD leaders affirmed they would vote for government projects aimed at eliminating privileges and sinecures, deeming these measures absolutely necessary and requiring urgent adoption. They also stated their intention to participate in all working groups discussing fiscal measures, public administration reform, and the emergency ordinance concerning PNRR projects.

PSD's interim president, Sorin Grindeanu, indicated that the party would present a package to relaunch the economy to the Prime Minister, emphasizing the need to discuss fiscal measures in conjunction with the budget rectification. Regarding the draft ordinance on PNRR projects, the PSD seeks to modify the selection criteria for funded projects and desires a different mechanism for choosing these projects, preventing the decision from resting solely with the Minister of European Funds. They also demand prioritization for projects with already signed contracts and agree to the elimination of those not yet signed. Grindeanu stressed the importance of transparency in decision-making, noting that relying solely on government memorandums would lead to bureaucratic blockages, and they are attempting to resolve this issue to avoid stagnation within ministries.

Regional Perspective

The PSD's decision to boycott coalition meetings signals deep disagreements within the Romanian government regarding spending and funding priorities. The PSD's focus on PNRR projects and the "Anghel Saligny" agreement reflects their concerns about the implementation of critical infrastructure and economic development. A continued boycott could slow down the decision-making process and delay important projects, impacting Romania's ability to fully leverage EU funds. Resolving this crisis requires political consensus on decision-making mechanisms and resource allocation.

Analysis

The PSD's decision to boycott coalition meetings is an indicator of political instability in Romania, especially given the urgent need to implement projects under the Recovery and Resilience Plan. The PSD aims to ensure that funded projects align with their development agenda and desires more transparent and accountable processes in project selection. The Prime Minister may be forced to make significant concessions to meet PSD's demands or face further legislative gridlock. In the long term, this conflict could affect investor confidence and Romania's ability to achieve its economic goals, necessitating a swift political resolution and close cooperation among coalition partners.