Romania ends five months of political paralysis with Niculescu government — but deal expires in six months

Romania's parliament voted on Tuesday to install Luca Niculescu as prime minister, ending five months of political paralysis after three failed attempts to form a government, but the arrangement carries a six-month deadline after which parties must renegotiate.

Niculescu, a former journalist and diplomat, was nominated by moderate President Nicușor Dan. The centre-left Social Democrats will join the cabinet; the centre-right National Liberal Party chose to remain outside it.

The threat of snap elections — which would likely boost the populist right-wing Alliance for the Union of Romanians (AUR) — pushed the two main parties toward the compromise. Romania has the sixth-largest population in the EU and hosts a major military base and a US missile shield site, giving its political stability significance beyond its borders.

Social Democrat leader Sorin Grindeanu told POLITICO Playbook Capitals that his party would try to pass an investment-focused 2027 budget by the end of November, aiming to revise the 2026 budget by the end of October and fast-track EU project implementation to unblock funds. "Romania needs an economic recovery plan, not austerity," Grindeanu said, describing his priorities as protecting purchasing power, supporting business and improving public services.

The Social Democrats toppled the previous coalition in May by teaming up with AUR, as unpopular debt-cutting measures drove their voters toward the populist right. Grindeanu said he would not seek a pact with AUR, citing deep disagreements over Europe and national security, but the PNL refused to sign a detailed coalition programme, forcing the administration to seek parliamentary support vote by vote.

Romania's constitution requires two failed attempts to install a government before parliament can be dissolved, making snap elections harder to trigger once the six-month pact expires.