In a stunning upset that has reaffirmed Romania’s pro-EU orientation, Bucharest’s independent Mayor Nicușor Dan has defeated George Simion, leader of the main opposition and nationalist Alliance for the Union of Romanians (AUR), in the country’s Presidential election run-off. Despite finishing a distant second in the first round on 4^th May, Dan secured a comfortable victory in the second round on 18^th May, with 53.6% of the popular vote. In line with Romania’s constitution, the Permanent Election Bureau (BEC) will submit the second-round results to the Constitutional Court (CCR) for certification. Provided that the CCR certifies the results during its upcoming session on 22^nd May, Dan could be sworn in as President as early as next week, succeeding interim President Ilie Bolojan.

Dan’s immediate challenge will be to secure a functioning majority in parliament after Romania’s grand coalition government, which includes the centre-right PSD, the centre-right PNL and the Hungarian minority UDMR, collapsed following the first round of the election. One possible scenario entails a pro EU government formed by the PNL, the USR and the UDMR, with parliamentary backing from the PSD. Another option is a broader pro-EU unity government including the PSD. Taking the composition of parliament into account, no government can be formed without the PSD, which remains the strongest party in parliament. President-elect Dan has stressed that he is aiming for the second option, with outgoing President Ilie Bolojan as Prime Minister. While snap elections remain a constitutional possibility if no stable government is formed, this seems unlikely as it would risk empowering nationalist parties.

Looking ahead, political instability will be a key risk for current and prospective investors to monitor. Support for nationalist formations has significantly increased in recent years, drastically altering the composition of parliament by breaking the once prominent PSD-PNL duopoly. In addition to political risks, fiscal concerns are also growing, with tough budget negotiations to follow as Romania heads for coalition talks.