“The inevitable has happened. Although there were hints suggesting a prospective break-up of the Social-Liberal Union, or USL, in 2014, it came a bit earlier than most had anticipated,” Erste said in a note.
Liberal leader Crin Antonescu on Tuesday evening announced his party decided to withdraw from the ruling coalition USL and join the opposition. USL officially broke up Wednesday morning after the liberal ministers handed in their resignation.
The rupture comes after months of political bickering between the liberals and the leftist social democrats, led by Prime Minister Victor Ponta.
To secure a new majority in the Parliament, the social democrats “will have to close ranks with their other two fellow companions in the ex-USL, the Conservatives and the National Union for the Progress of Romania, while trying to win over additional support from ethnic minorities,” Erste said in its note.
“We see a reshuffled Ponta cabinet continuing until at least the presidential elections slated for early November”.