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Europe’s ‘Good’ Orban Plots Risky Course to Undo Populist Damage

Andra Timu and Irina Vilcu

(Bloomberg) -- Romania’s new prime minister might share a surname with anti-immigrant Hungarian leader Viktor Orban, but the similarities end there.

Ludovic Orban wants to return his country to the European Union mainstream by snuffing out the kind of populism his namesake has championed. He’s even referred to himself as the “good” Orban because of their contrasting ideologies, though wants to maintain cordial ties with his neighbor.

Romania’s Orban has much to do. The last government was more in the mold of those in power in Budapest or Warsaw, which have irked the EU to the point of facing unprecedented sanctions for violating democratic norms.

Having taken office in November, 56-year-old Orban is seeking to annul controversial policies of the previous administration that softened punishments for crooked officials, blew up the budget and slapped banks with a “greed tax.”

But he’s chosen to fast-track his legislation -- a potentially perilous approach that offers opponents multiple opportunities to oust his minority government in what’s become the EU’s most politically volatile member-state in the three decades since communism fell.

“We can’t risk a fragmented debate on these rapidly needed law changes,” Orban said Sunday in an interview in Bucharest. “But this procedure must be used judiciously.”

First up for fast-tracking are the banking levy and some judicial amendments. But Orban is also in a bind over the budget.

The Social Democrat-led government that ran Romania before party boss Liviu Dragnea was locked up for corruption wasn’t shy to spend -- repeatedly lowering taxes, lifting state salaries and boosting the minimum wage. That’s left a deficit beyond the EU limit 3% of economic output, and Romania’s currency near an all-time low.

Totally Reckless

“The rise in spending has been totally reckless,” Orban said, vowing to switch the focus to investment, which has long been neglected. “Of course we’ll need to cut back.”

That hasn’t been a problem in Orban’s personal life. He’s one of the poorest premiers in Romania’s history, according to his official asset declaration, calling himself “modest, even austere.” Last year’s income barely exceeded 600 euros ($663) a month. He drives a 12-year-old car.

Orban says he has a plan to trim unnecessary spending and boost revenue -- including via sales of stakes in state-owned companies. European Commission warnings of the deficit reaching 6% in 2021 won’t come to pass, according to the prime minister.

Even so, a 40% jump in pensions approved by the previous government is proceeding in 2020. Cuts are tricky with elections scheduled for next fall.

Snap Elections?

There could, however, be a snap vote -- Romania’s first -- before then, to capitalize on Orban’s poll lead and win a majority for his Liberal Party in parliament.

“Early elections aren’t a case of mission impossible,” Orban said, though stresses that some parties who helped put him in charge oppose the idea. “We’re discussing it.”

If he can successfully navigate the next ballot to remain in power, there are longer-term challenges. Romanians still seethe at poor roads, hospitals and schools. Many leave for higher-paid work in western Europe.

For now, Orban wants to smooth over ties with Brussels, even looking ahead to adopting the bloc’s common currency and joining its passport-free travel zone.

“It’s up to us to ensure we run at the same speed as the EU,” he said. “We need to make sure we’re ready to join the euro-area and to have the judiciary surveillance lifted and beadmitted into Schengen. If we remain in power, the plan to join the euro-area in 2024 is feasible.”

To contact the reporters on this story: Andra Timu in Bucharest at atimu@bloomberg.net;Irina Vilcu in Bucharest at isavu@bloomberg.net

To contact the editors responsible for this story: Andrea Dudik at adudik@bloomberg.net, Andrew Langley

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