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Picture Courtesy: Balkaninsight.com

Context:

Romania has emerged from its most severe political crisis with the inauguration of Nicușor Dan as President on May 26, 2025. 

Romania

It is a country in southeastern Europe and a member of the European Union (EU) and NATO.

It share borders with Ukraine to the north and east, Hungary to the west, Serbia to the southwest, Bulgaria to the south, Moldova to the east, and the Black Sea to the southeast.

It is the twelfth-largest country in Europe and the sixth-most populous member state of the European Union.

Europe's second-longest river, the Danube, empties into the Danube Delta in the southeast of the country.

The Carpathian Mountains cross Romania from the north to the southwest and include Moldoveanu Peak.

Bucharest is the country's largest urban area and financial centre

Political Crisis

Late 2024 => Far-right candidate Călin Georgescu leads in presidential election, triggering concerns about Russian interference.

December 2024 => Romania's Constitutional Court makes unprecedented decision to annul election results citing electoral violations. And also banned him from contesting.

May 18, 2025 => Rerun election held - Independent candidate 'Nicușor Dan' defeats George Simion (in place of Călin Georgescu) with 53.6% of votes.

May 22, 2025 => Constitutional Court rejects Simion's appeal challenging rerun results.

May 26, 2025 => Nicușor Dan officially inaugurated as Romania's President.

Economic Crisis

Fiscal Challenges => Romania faces the European Union's largest budget deficit, creating immediate pressure for fiscal consolidation. The European Commission projects the deficit will remain at 8.6% in 2025 and 8.4% in 2026 under current policies.

Dan's Economic Strategy => President Dan has set an ambitious target of reducing the deficit to 7.5% of GDP in 2025, which he describes as "optimistic but realistic." His approach emphasizes fiscal discipline over tax increases.

Market Implications => Romania maintains the lowest investment grade rating from major credit agencies (S&P, Fitch, Moody's). Failure to implement adequate fiscal reforms could increase borrowing costs and potentially blocking EU funds.

Source: 

THE HINDU