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Consultant și analist de risc politic, CEO Smartlink, fost Policy Manager la Google Bruxelles

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Understanding the country’s managing coalition for a risk averse 2021

After two turbulent electoral years and a pandemic, Romania should be ready for a new set of political and economic challenges in 2021.
editorial radu magdin_ok

The governing coalition formed by the PNL, USR-PLUS and UDMR will be under immense pressure to deliver a reformist agenda, while keeping the political tensions inherent to a multi-party arrangement at bay. For those in the business sector interested in political risk, strategic communications, and public affairs, here are some political and strategic insights to consider this year.

The vaccination campaign will represent a major test for the state capacity in the general and for the new government’s abilities, in particular. The essential objective of delivering the vaccine as fast as possible to allow an economic restart and a return to normal life will give a sense of purpose and a certain focus that is usually not typical for how the government works. This means that a lot of energy will be dedicated to this task and other policy decisions could be put on hold. Expect delays and less attention given to topics that are not essential for the COVID-19 health and economic bundle (here primarily, in January, I mean the state budget 2021 design and approval).

In terms of the relations between the PNL and the USR-PLUS Alliance, it will not be an easy ride. As a virgin – but loud – coalition partner, the USR-PLUS will have to make compromises to a more pragmatic – but also more discrete, like the nature of political negotiations – PNL, while keeping its electoral basis happy and sending the signal that it is part of the government to change things, not to validate “business as usual” in terms of how things are managed.

What should be done and what can be realistically done will produce regular crises of varying intensities, problems will not be kept under the rug, and the idea of an opposition within the government will gain more and more ground. Even if the governmental competencies are clearly divided between the partners, pushing a project (especially a major one) forward will require political agreement from both (or should we say multiple – camps in PNL, USR, Plus, UDMR, PM persona) political sides.

As in the case with every coalition government, the Parliament is back in business and will be the place where many issues will be settled, not just edited. Given the lack of policy and political experience of many MPs and ministers, it will take some time for a working balance to be found between the legislative and executive branches of the government. Nonetheless, getting a good sense of who is who and the sectoral working relations will be an essential part of navigating the first half of the year. The nextgen power players will emerge out of the coalition decision vacuums or (way-too)speedy actions in Q1, do watch out also for informal leadership beyond actual holders of formal positions.

Despite the fact that the PNL came to power in 2019, the dominant sense is the one of a clear break with the past. So, expect many audits and special attention given to past regulations, contracts and the function of governmental agencies. Especially on the USR-PLUS side, the decision-makers will not want to move forward on various dossiers before getting the confirmation that they are on safe ground and the problematic aspects have been released to the public or sent to the prosecutors. The increasing sentiment that there is no honeymoon for the government has brought about the sentiment that the easiest way to score some political points in the first few months of the year is by exposing what does not work in subordinate institutions and policy areas – so, this will look more like bomb defusal policy.

We currently only hear about this in the background (“budget consolidation”), but the discussion on the budget will be key once the Parliament resumes activity, maybe even next week. Some tough choices will have to be made and we have already seen some decisions adopted through emergency ordinances in the last few hours of 2020. The tendency to stabilize the country’s finances and to be stingier with the public purse will mean that any decision with financial consequences will be hard to move forward. Moreover, there are indications that predictability is the kind of word parties typically use when in opposition and forget when they come to power – for the business sector, it will be a year of crisis management and of fast mobilizing and arguing against imminent governmental decisions. This is why a good understanding of the decisional process, both at the ministerial and parliamentary levels, will be an essential part of the regulatory agenda.

All in all, 2021 is not about being optimistic or pessimistic, it is about being prepared and ready (again) for some turbulent times. One great piece of news is that stakeholders will be ready more than ever for good news, practical ideas and solutions from the private sector, whether local or foreign, business thereby having leverage if proving strategic and timely initiative(s).

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