Page 20 - SE Outlook Regions 2022

aims to resolve the situation.

Slovenian ambassador to Skopje Milan Predan, whose country was the
holder of the EU presidency until the end of 2021, was optimistic about
a possible solution between North Macedonia and Bulgaria that will
unblock Skopje’s EU integration process by the end of the 2021 or
possibly in January.

US Deputy Assistant Secretary in charge of the Western Balkans
Gabriel Escobar expressed his strong support in December for the
quick EU integration of North Macedonia.

1.9 Politics - Romania

An alliance of the Social Democrats (PSD) with the Liberals (PNL) is
expected to rule Romania for the coming three years, until the
super-electoral year 2024.

The unexpected coalition between Romania’s main centre-left and
centre-right parties was formed after several months of deep political
crisis after the breakup of the former centre-right coalition formed by the
PNL and Union Save Romania (USR). The earlier coalition was seen at
the time of its formation as the end of the Social Democrats’ influence,
at least temporarily, even though the PSD is the largest party in the
current parliament. Yet just a couple of years later, the PSD was back in
power alongside the PNL after the latter fell out with its reformist junior
coalition partner.

The political crisis in September-November 2021 and the alliance that
followed it put an end to the electorate’s hopes for quick democratic and
economic advancements particularly in the area of rule of law, driven by
USR. Nonetheless, Bucharest will be under pressure to keep up the
pace of reforms and economic stabilisation from both the National
Recovery and Resilience Plan (PNRR), already approved by the
European Commission after being sketched during the short-lived
reformist centre-right government, and the Excessive Deficit Procedure
(EDP) that was suspended during the pandemic but still includes tight
targets including a general government deficit of under 3% of GDP by
2024.

This framework provides some stability as regards the future policies
pursued (budget planning, public administration modernisation), given
the targets and the milestones included in the PNRR.

On the downside, the commitment to reforms and the credibility.of the
new alliance are at least debatable. The National Liberal Party has no
leader after prime minister Florin Citu won the party's internal elections
but lost the prime minister seat. The Social Democrats are no longer
headed by politicians under investigation for corruption, but it hasn’t
undergone deep internal reforms towards becoming a genuine social
democratic party many Romanians, facing the widest income

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