Macro: Short note CEE: Romania - Early elections in June this year?

President Klaus Iohannis and Prime Minister (PM) Mr Orban push for early elections: after a no-confidence vote ousting the minority government of National Liberal PM Orban, the proposed cabinet is likely to fail to pass a vote on 24 February. This would mark another step forward towards early elections originally scheduled for autumn. The parliament has, however, to reject another (the second) vote about a new cabinet before early elections can be called. The PM made clear his reference to have early elections as close as possible or even together with local elections likely be held on 14 June as one would have to run only one campaign for both polls.
Overall, early parliamentary elections certainly the most market-friendly scenario became much more likely compared to a month ago, although there are still several factors that could delay or even derail them.
Liberals are likely to benefit the most from early elections, as they doubled their score in electoral polls to 45% as of last December. Meanwhile, PSDs score went down to under 20%. according to Europa FM radio barometer.
The looming EUs Excessive Deficit Procedure (EDP) left RON markets unimpressed and could be used as an excuse to withdraw and/or modify some fiscal expenditures measures.

This Research was produced and first published by Raiffeisen Bank International AG which is supervised by the Austrian Financial Market Authority and the National Bank of Austria.