The governor of the National Bank of Romania (BNR) Mugur Isarescu and first deputy governor Florin Georgescu are set to be confirmed for new five-year terms, after the former remained in his seat almost continuously since 1990. Virtually all major political parties have confirmed their support for Isarescu, while Georgescu is backed by the senior ruling Social Democratic Party (PSD). 

The ruling PSD’s readiness to back Isarescu follows recent clashes between the government and the central bank, as the PSD accused the central bank of not defending the national currency, while the finance ministry made it clear that exchange rate policy is the central bank’s duty. In turn, the central bank accused the government of failing to coordinate on key policies.

Isarescu also reportedly spoke out against the government’s plans to bring home Romania’s gold held at the Bank of England. 

Raiffeisen bank analysts commented in a July 1 note on the “series of unpredictable policy moves by government officials” as they appeared to flip-flop on Isarescu’s reappointment. 

Despite this, continuity is expected at the bank as lawmakers prepare to vote on its board on July 3. Very few new candidates are on the list compiled for lawmakers to vote on, and even fewer are likely to get a board member seat. 

Notably, Daniel Daianu, a candidate of the main opposition National Liberal Party (PNL) will no longer run for a seat, being re-assigned as a member of the Fiscal Council. The Fiscal Council’s head Ionut Dumitru, with no declared political affiliation or open support, will run instead as a member of the central bank’s board. Liviu Voinea, a board member and one of the two deputy governors supported by the ruling PSD, will leave for a position with the International Monetary Fund (IMF), and will most likely be replaced by Leonard Badea, another PSD candidate who is currently the head of the financial markets’ regulator, ASF.

The list of BNR board members expected to maintain their positions also include deputy governor Eugen Nicolaescu (a PNL nominee). Among the five non-executive members of the board, three will receive a new term as well: two PSD candidates (Gheorghe Gherghina and Marin Dinu) and one PNL candidate (Virgiliu Stoenescu). The Democratic Alliance of Hungarians in Romania (UDMR) will replace Agnes Nagy with OTP Bank economist Csaba Balint. 

The new candidates are running for a single seat. Beside Dumitru, the list of new candidates include young but experienced economist Cristian Popa, 32, the head of investment at NN pension fund management arm, supported by the Save Romania Union (USR). The PSD proposed two university professors, Aura Socol and Horia Ion-Neamtu, the latter being a former PSD MP.

Fiscal Council gets new members as well

Much more significant changes will be seen in the management of the Fiscal Council. So far, Raiffeisen Bank economist Dumitru has headed the council, which has been constantly very critical of the government’s moves. The new leadership, to include more academics and candidates from the central bank will on the one hand likely express more moderate views, but on the other hand will have much stronger credibility. While the outgoing Fiscal Council has always backed up its criticism with quantitative evidence, the government has been in a better position to criticise Dumitru himself as a representative of a foreign bank.

Beside Daianu, who is expected to move across from the central bank, the Fiscal Council’s new board will also include George Georgescu proposed by the Romanian Academy, Bogdan Octavian Cozmanca from the central bank, Georgiana Camelia Cretan of the Academy of Economic Studies, and Sebastian Bogdan Capraru, proposed by the Romanian Banking Institute, also an academic.