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On Tuesday, May 5, 2026, the government of Prime Minister Ilie Bolojan was officially dismissed after a no-confidence motion passed in the Romanian Parliament. The motion, titled "STOP the Bolojan Plan of destroying the economy", was adopted with 281 votes in favor and only 4 against, while Bolojan's National Liberal Party (PNL), the neoliberal Save Romania Union (USR) and the Democratic Alliance of Hungarians in Romania abstained from voting. The motion was spearheaded by the Social Democratic Party (PSD), Bolojan’s coalition partner, and the opposition nationalist-conservative Alliance for the Union of Romanians (AUR), a partnership that shocked the media and the political class, which declared zero tolerance for any cooperation with the supposedly anti-European far-right. This newest political crisis in Romania reflects the contradictions of inevitable economic turmoil in the current phase of global capitalism. The political upheavals reflect a structural state of disorder installed during the country's decades-long capitalist transformations.
Enikő Vincze is a professor of sociology and critical urban studies in Cluj, Romania. She has published extensively on housing regimes in socialism and capitalism, financialization of real estate development, and the impact of EU policies on these processes.
The no-confidence motion in Parliament comes at the heels of 10 months of austerity. The measures have been justified as necessary to reduce the public deficit and government debt. Notably, the government has not suggested any policies to increase state revenue, such as a progressive income tax, a wealth tax on large fortunes, or tax increases on corporate profits.
The so-called “pro-European coalition” was on shaky ground right from the start when it was formed in June 2025. The coalition’s instability was linked to the contentious 2024 parliamentary elections and the tumultuous 2024/2025 presidential race, and to the democratic deficit these events revealed. Despite some frictions, the coalition implemented a series of measures that mostly affected the working class and vulnerable groups. The consensus around these reforms across political divides demonstrates how the boundaries between liberals, neoliberals, and social democrats have become blurred during the past 36 years – which is a root cause of the deep political crisis Romania is facing today. Besides their anti-social character, these interventions triggered an economic recession characterized by inflation hovering above 9% throughout late 2025 and early 2026, while GDP contracted by 1.9% in the fourth quarter of last year, and unemployment increased to 6.1% in March 2026.
Despite their democratic deficit, all four political parties in the grand coalition were aligned on an aggressive agenda of welfare cuts and increased military spending.
In their no-confidence motion, PSD and AUR argued against the Bolojan government, which impoverished the population and endangered the country’s economic stability, while preparing to sell shares in many strategically important state companies in a non-transparent manner. One may detect several inconsistencies beyond these officially circulated motives. For instance, while PSD had a significant role in past state-led privatizations, it now opposes privatization. The PSD also voted for the dismissed government’s austerity measures, which they now criticize. AUR, on the other hand, bemoans the population’s impoverishment; however it does not address working-class issues or the need for public services, committed to the Romanian capitalist class and to cuts in public spending as it is.
Austerity for Workers, Support for Capitalists
As a result of measures implemented by the Bolojan government, sales tax rose from 19% to 21%, and reduced rates of 5% and 9% were consolidated into a single 11% bracket. This meant price increases for all goods and services, including food staples and medicines. Moreover, because a pre-existing electricity price-capping scheme was not extended, electricity costs drastically increased starting in July 2025. Higher excise duties on petrol and diesel also led to general price escalation, while public-sector wages and pensions were capped at 2024 levels. The austerity government eliminated exemptions from health insurance contributions for several social categories, including mothers on parental leave and pensioners, and introduced stricter monitoring of sick leave. Vulnerable groups were also affected by the decision to empower local administrations to deduce debt taxes and fines from social aid payments. As an attempt to make savings, the Bolojan government increased teachers’ workload and the number of students per class, merged schools in rural areas, and cut student scholarships.
While the austerity measures most affected the working class, the now-dismissed government made only a few changes that negatively impacted private capital, such as raising the tax on dividends from 10% to 16% and doubled the special turnover tax for banks from 2% to 4%. On the other hand, Bolojan gained the support of the private sector by halving the tax on turnover to 0.5% for companies exceeding €50 million in revenue, with plans to eliminate the tax completely by 2027; by simplifying the tax regime for micro-enterprises through a single 1% tax rate on income for all businesses with revenue of up to €100,000; and by maintaining the standard 16% corporate profit tax. Most importantly, Bolojan explicitly prioritized foreign direct investment by going public with minority stakes of major state companies on the Bucharest Stock Exchange, providing new investment vehicles for wealthy investors and private funds.
The political crisis in Romania reflects the contradictions of inevitable economic turmoil in the current phase of global capitalism. The political upheavals reflect a structural state of disorder installed during the country's decades-long capitalist transformations.
The dismissed prime minister occasionally held high-level meetings with the Foreign Investors Council and the American Chamber of Commerce, referring to them as "Romania's economic ambassadors," and made frequent direct consultations with major business organizations. Moreover, Bolojan brought several prominent figures from the private sector into the prime minister's office. The 2026 budget allocated 49.4 billion lei to the Ministry of Defense, representing a 34% rise over the previous year, and increased the Intelligence Service’s budget by 13.82% (to 5.2 billion lei), while education and healthcare saw stagnation or cuts.
However, the dismissal of the Bolojan government cannot be explained solely by the severity of its austerity measures. After all, several trade union-led anti-austerity protests failed to stop Bolojan and his team. The most important explanatory factor in Bolojan’s eventual removal is how the parties responded to the political situation that emerged after the 2024/2025 elections. This seems to be the moment when the two political parties, PSD and AUR, who were the winners of the 2024 parliamentary elections, sought to take revenge on PNL and USR, who had marginalized them. In the last debates before the government's collapse, Bolojan suggested that PSD leaders were “rats” leeching off the state budget; he referred AUR an anti-European "far-right surge"; and called their joint motion an act of destabilization.
Anulled Presidential Elections
Most importantly, the Bolojan government’s instability stems from the country’s democratic deficit. How much the legitimacy of the traditional parties has suffered became clear in the 2024 elections. Three relatively new political parties won 30% of the seats in parliament in 2024. And in the presidential race it was independent candidates, not the established parties, that saw success. After far-right independent Călin Georgescu won the first round of the December 2024 presidential election, the Constitutional Court annulled its outcome, and in early March 2025, Georgescu was barred from running in the repeat May 2025 elections. This means that the ballots of over 9 million citizens in December were voided, and 41 percent of voters – those who, in opinion polls prior to the repetition of the canceled elections, had expressed their intention to choose Georgescu as president – were deprived of making their preferred choice. A further aspect of the inherent instability of the current situation is that even though PSD and AUR are the two largest political forces in the Lower and Upper Houses of the Romanian Parliament (holding 130 and 90 seats of the total of 465 mandates), PNL (occupying 75 seats), had a predominant role in the government and USR (with only 58 mandates) ran four important ministries: Defense, Foreign Affairs, Economy and Digitalization, as well as Environment.
The Romanian case illustrates how neoliberalism creates conditions in which far-right forces become attractive due to a lack of alternatives; it co-opts and defangs left-wing parties until they become unpopular; and makes radical socialist politics impossible by transferring economic decision-making from democratic institutions to central banks and international bodies.
Despite such a democratic deficit, over the last 10 months, all four political parties in the grand coalition were aligned on an aggressive agenda of welfare cuts and increased military spending. This agreement is in line with global trends, in particular the US and EU warfare-state politics. Moreover, it should be interpreted in the light of the repeat presidential elections of May 2025, when people had to choose between two strands of right-wing extremism: George Simion of AUR, standing for its nationalist variety in support of the national bourgeoisie, and independent Nicușor Dan, supported by USR, representing its neoliberal incarnation for the benefit of foreign capital. But while the two political camps frame their battle as one between anti-globalism or national sovereignty versus anti-fascism or pro-Europeanism, both have sustained the anticommunism of the last three decades.
In Romania, anticommunism functions as both an ideology and a practice targeting not only the socialist past but also any socialist future. This manifests in the state of the left in the country. Even though the social democrats played a huge role in the formation and evolution of capitalism in Romania, due to their limited but still existent social policies, they were blamed by liberals and neoliberals for corruption and for feeding the large networks of their “local barons”. Novel initiatives, such as DEMOS and SENS mostly criticized the PSD as they built up their political image, identified with progressive liberals, and nurtured a pro-capitalist “left”. More radical, anti-capitalist, socialist alternatives are ridiculed as communist nostalgia. Meanwhile popular opinion is in open revolt against capitalism's failure to fulfill its promise of a better life. The Romanian case therefore illustrates how neoliberalism creates conditions in which far-right forces become attractive due to a lack of alternatives; neoliberalism co-opts and defangs left-wing parties until they become unpopular; and makes radical socialist politics impossible by transferring economic decision-making from democratic institutions to central banks and international bodies.
Implementing extreme measures, such as austerity coupled with militarization, national leaders are making sure that Romania continues playing its semi-peripheral role in defending capitalism in the new cycle of systemic crisis while safeguarding the country against the potential of a socialist alternative. This role is not new. Since the 1990s, the country has served capitalist interests as one of the former state socialist nations that underwent regime change. Romania provided a cheap labor force to Western Europe with more than 4 million Romanians emigrating since 1990, an export market of 20 million consumers, and natural resources for Western manufacturers seeking profitable investment opportunities to address over-accumulation and the problems of declining profits they encountered in the core countries of Western Europe during the 1980s. In turn, as an EU and NATO member state, Romania serves as a frontline or buffer state vis-à-vis its peripheral neighbors, such as Moldova or Ukraine. Additionally, the collapse of state socialism in Eastern Europe serves as a convenient ideological argument for capitalism as the only possible world order.
A Subordinate Interregnum
The political storm linked to the dismissal of the Bolojan government reflects the ongoing economic crisis in a semi-peripheral country with capitalist characteristics. Romania continues to rely on foreign capital investments and European funds, most importantly the money transferred to this country through the ongoing National Recovery and Resilience Plan. The Plan prescribes constant reforms to align with the priorities of the core EU countries. In the 1990s and 2000s, Romania’s dependent development meant the overall privatization of enterprises, land, housing, and the banking sector, as well as the liberalization of prices. Today, the priorities defined by the EU institutions impose adjustments on Romania as a Member State to respond to the current needs of the capitalist class. The latter includes opening capital markets to global finance, expanding private pension funds, using public money or loans for militarization, privatizing the last state-owned companies, and pushing for more privatization in school education and healthcare.
The condition of subordinate interregnum signals the total failure of the post-socialist “transition” that was supposed to lead us towards a bright capitalist future with no other alternatives
Obviously, this current crisis is only one of the many cycles Romania has gone through during its capitalist transformation. The starting point in this process was the destruction of socialist economic and political structures and their replacement with a neoliberal arrangement that fit into the capitalist world system of the late 20th and early 21st centuries. Such an endeavor could not create anything other than a permanent state of uncertainty, which I call a subordinate interregnum. Since the destruction of its socialist system, semi-peripheral Romania is in a state of lasting interregnum, i.e., “a prolonged period of social entropy” as German sociologist Wolfgang Streeck called it in his 2016 book How will Capitalism End. Consigned to such a status, the country’s primary preoccupation was, is, and will be to meet the expectations of the capitalist world system, as mediated through the European Commission, NATO, the World Bank, or the International Monetary Fund. To accomplish this aim, Romania’s political leaders implement a continuous process of economic and societal transformations and maintain perpetual disorder. The condition of subordinate interregnum signals the total failure of the post-socialist “transition” that was supposed to lead us towards a bright capitalist future with no other alternatives. Instead, this transition compelled us, through privatization and the transformation of the state into an agency supporting private capital to the current stage of the system’s crisis.
