One year ago, the European Union celebrated the victory of pro-European candidate Nicușor Dan over ultranationalist George Simion in Romania’s presidential race, hoping that the moderate president could bring stability and end the prolonged political crisis of the eastern European member state.
Now, one year later, the country has been plunged even deeper into crisis, as the Social Democratic Party (PSD) withdrew from the already fragile governing coalition—consisting of the PSD, the centre-right National Liberal Party (PNL), the liberal-progressive Save Romania Union (USR), and the Hungarian minority Democratic Alliance of Hungarians in Romania (RMDSZ)—and teamed up with Simion’s Alliance for the Union of Romanians (AUR) to topple Prime Minister Ilie Bolojan.
PSD and AUR are currently the two largest parties in the lower house of Romania’s legislature, controlling 219 seats in parliament, just 14 short of the majority needed to remove the prime minister. President Nicușor Dan has so far ruled out appointing a government dependent on AUR; however, he could ultimately be left with little alternative if the motion succeeds. According to information available at the time of writing, the vote is expected to be held in early May.
There are two main reasons behind the current crisis. The first is the coalition’s fundamental ideological fragility, as it was formed primarily to keep AUR out of power—a strategy that is becoming increasingly difficult to sustain given that the party leads every credible poll by a wide margin over mainstream parties. The second factor, closely connected to the first, is the deepening dispute over austerity measures, fiscal consolidation, and the pace of EU-linked reforms.
Facing one of the highest budget deficits in the European Union, Bolojan’s government pushed for spending cuts, structural reforms, and stricter fiscal discipline in order to secure billions in Recovery and Resilience Facility (RRF) funds before critical August deadlines. PSD increasingly opposed these measures, accusing the prime minister of causing ‘economic and social collapse’, failing to consult coalition partners, and pursuing reforms that would politically damage the party’s interests and social base.
A Potential Leverage in EU Funding Talks
At the same time as Romania was once again descending into political crisis, Hungary’s long-time leader Viktor Orbán suffered a historic electoral defeat, paving the way for the Tisza Party and Péter Magyar to pursue a more pro-EU agenda aimed at unlocking currently frozen EU funds, part of which—similarly to the Romanian case—are also tied to an August deadline.
Depending on the outcome of Romania’s unfolding crisis, regional politics could be reshaped in several important ways. In the following analysis, we present two scenarios that are particularly significant from the perspective of Hungary, its incoming government, and the Hungarian minority living in Transylvania.
If the motion of no confidence succeeds and no stable majority emerges afterwards—which is becoming an increasingly plausible scenario—Romania could enter a prolonged period of caretaker governance or repeated failed coalition negotiations. This would likely undermine the implementation of structural reforms, increase the risk of losing EU funding, and ultimately strengthen anti-EU sentiment within the country.
Such a development could create a geopolitical opening for Hungary’s incoming government in its negotiations with Brussels over currently frozen EU funds. Talks have already begun between Péter Magyar’s Tisza Party and the European Commission regarding the implementation of reforms required to unlock the funding.
‘Such a development could create a geopolitical opening for Hungary’s incoming government in its negotiations with Brussels’
When Brussels froze these funds in 2022, it tied their release to the fulfilment of 27 so-called ‘super milestones’ related to anti-corruption measures, public procurement transparency, judicial independence, and broader rule-of-law guarantees. Crucially, no payments can be made until all 27 milestones are fully implemented, which remains the Commission’s official position.
Given the limited timeframe, it is effectively impossible for Hungary to complete all 27 milestones before August, meaning that part of the funding—estimated at around €10 billion—could be permanently lost. However, the Romanian crisis may create circumstances in which Brussels increasingly concludes that a partially reformed but cooperative Hungary under Péter Magyar is strategically preferable to another escalating regional confrontation, which could emerge if the funds were lost entirely.
This would not necessarily mean formally abandoning rule-of-law conditionality for Hungary—a step that would also carry serious legal and political risks—but rather moving towards a more flexible model of ‘phased conditionality’: accelerated technical approvals, partial disbursements linked to visible reform progress, and a more pragmatic interpretation of the milestones ahead of the August deadline.
Such a scenario would also produce an ironic geopolitical reversal. Romania, long portrayed as the EU’s ‘model pupil’ in the region—particularly in relations to Orbán’s Hungary—could increasingly become a source of instability, while Hungary under Tisza would emerge as Brussels’s preferred success story in Central Europe.
Unwanted Tensions
There is, however, another scenario that could negatively affect the Hungarian minority in Transylvania and create serious headaches for the incoming Tisza government. There is a non-negligible possibility that AUR could gain huge influence over the next government, either as an external supporter or, more radically—though less likely—from within the coalition itself.
AUR and its leader George Simion rose to prominence not only through Euroscepticism, but also through a hard-right ultranationalist and anti-Hungarian platform. Although this rhetoric has appeared more moderate in recent years, it has by no means disappeared completely. Magyar himself sharply criticized Viktor Orbán after the outgoing prime minister’s implicit endorsement of Simion during last year’s presidential campaign, while the Hungarian minority overwhelmingly supported Nicușor Dan against Simion in the election.
Since then, Magyar has repeatedly signalled that, as prime minister, he intends to stand up for Hungarian minorities beyond Hungary’s borders, meaning that such a scenario could produce fundamental—and unwanted—tensions in bilateral relations.
However, the main issue goes beyond rhetoric. Simion’s key proposals for reducing government spending include cutting the number of parliamentarians and reducing subsidies to political parties. At first glance, these appear to be legitimate anti-elite and anti-establishment measures. In practice, however, they would disproportionately affect minority parties and could even jeopardize the Hungarian minority’s parliamentary representation.
Currently, RMDSZ relies heavily on fragmented coalition politics, territorial concentration in Transylvania, and institutional bargaining power rather than broad national support. Over the past decades, it has established itself as a recurring kingmaker within Romanian politics, effectively defending and representing the interests of the Hungarian community in Transylvania.
‘The combined effect of these proposals could significantly diminish RMDSZ’s political leverage’
Parliamentary downsizing, however, would raise the effective electoral threshold, reducing RMDSZ’s seat share and weakening its traditional kingmaker role. At the same time, cuts to party financing would hit minority parties harder than larger Romanian parties with broader donor networks and stronger media ecosystems. The combined effect of these proposals could significantly diminish RMDSZ’s political leverage, coalition relevance, and ability to defend minority interests.
At the same time, Magyar has promised a retrospective review of how funds allocated to Hungarian minority communities under Viktor Orbán were used in Transylvania. Part of these funds reportedly flowed—indirectly—towards strengthening RMDSZ’s ecosystem through NGOs, cultural initiatives, and other organizations. Reviewing and potentially reducing these resources could further weaken the largest party representing the Hungarian minority and, by extension, its political representation and unified voice within the Romanian legislature.
Taken together, these developments could ultimately force Péter Magyar into a far more assertive and confrontational Romania policy than initially planned. If RMDSZ weakens institutionally while AUR simultaneously gains influence over the Romanian state, Budapest may increasingly conclude that indirect representation through coalition politics is no longer sufficient to defend Hungarian minority interests in Transylvania, pushing the incoming government towards more direct diplomatic pressure and stronger rhetoric on minority rights.
Such a shift would mark a major departure from the relatively pragmatic Hungarian–Romanian relationship of recent years, while also creating unwanted foreign policy tensions for an administration whose primary political focus is expected to remain on domestic transformation and institutional reform.
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