Country Risk

Formation of Romania's third Social Democrats-led cabinet reduces risk of early election, government efficiency likely to decrease

19 January 2018
Viorica Dancila (left), the appointed Romanian prime minister, speaks to journalists next to Liviu Dragnea, the leader of the ruling PSD, at parliament in Bucharest on 17 January. Source: Octav Ganea/AFP/Getty Images

Key Points

  • The designation of Dancila as prime minister decreases the risk of an early election in the one-year outlook.
  • The PSD leadership under Liviu Dragnea is likely to maintain strong oversight over the government.
  • The government reshuffle poses risks to the efficiency of the central administration during the next six months.


On 17 January, Romania’s President Klaus Iohannis designated Viorica Dancila, a member of the European parliament and the ruling centre-left Social Democratic Party (PSD), as the country’s next prime minister.

Third PSD-led government in a year

Dancila’s nomination was proposed by the PSD and supported by its junior coalition partner, the Alliance of Liberals and Democrats (ALDE). On 16 January, after losing the support of the National Executive Committee of the PSD, Mihai Tudose, a member of the Committee, resigned as prime minister. Tudose’s government had replaced the first PSD-led cabinet headed by Sorin Grindeanu – also of the PSD, and formed after the December 2016 general election. Grindeanu’s government lost a vote of no-confidence initiated by its own PSD-ALDE ruling majority.

The PSD holds most of the seats in the Chamber of Deputies, the lower house of parliament, and in the Senate. The PSD-ALDE stable majority permits easy adoption of legislation. As part of the consultations prior to establishing the new government and aiming to prove that PSD and ALDE still hold the parliamentary majority, Dragnea provided the president with a list of MPs from the two parties who support Dancila’s appointment to the prime ministerial position. An extraordinary parliamentary session slated for 29 January is expected to approve Dancila’s candidature.

Dancila in Dragnea’s political circle

Dancila is regarded as close to Dragnea and unlikely to overshadow him in the public’s view or amass enough influence to pose a threat to his leadership. The PSD National Executive Committee voted unanimously for her nomination with only one abstention.

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