Romania's government has been thrown into turmoil after the Social Democratic Party (PSD), the biggest party in the ruling coalition, withdrew its support for Prime Minister Ilie Bolojan. The move has sparked fresh political turbulence and may lead to a collapse of the ruling alliance, potentially plunging the country into a political crisis.
Prime Minister Bolojan is poised to defy calls to resign. On Tuesday, he announced that he will lead a minority government, while his own bloc rallies to salvage his control of the four-way coalition.
This period of instability is expected to pressure debt and credit ratings. Bolojan stated that his decision to lead a minority government is intended to ensure that reforms needed to tap European Union funds are met, as the receipt of these funds remains a critical concern.