The new administration could help stabilize the country, which has been in political turmoil since its top court annulled the results of the first round of presidential elections due to concerns about alleged Russian interference.
Outgoing President Klaus Iohannis helped form the coalition, calling on the political parties involved to unite in the face of the country’s deepening crisis and vulnerability.
Iohannis gave the official task of creating a government to the incumbent Social Democrat Prime Minister Marcel Ciolacu.
"I am aware it won't be an easy mandate; it is essential that this government regain investors' confidence," Ciolacu told reporters.
The coalition, which is expected to receive parliament's vote of confidence later on Monday, includes the left-wing Social Democrats, the center-right Liberals and the ethnic Hungarian party UDMR.
Including minority representatives, it will control about 54% of seats in the legislature.
Rising pressure from the hard-right and pro-Russian groupings, which won more than a third of the seats in the December 1 general election, helped to align the three government-forming parties.
Presidential elections set for re-run
The ruling grouping, which—as the government—will set the date for re-running the presidential elections, has already decided to back one candidate in an effort to fend off the inevitable far-right challenge.
Their candidate at the moment is Crin Antonescu, a former Liberal Party leader.
The first round of the annulled elections was won by the ultra-nationalist Călin Georgescu, a little-known horse-riding judoka who managed to upset the Romanian political establishment and send shockwaves through Europe.
Declassified Romanian intelligence documents alleged he benefitted disproportionately from a TikTok campaign that was reportedly financed by foreign actors, leading to an investigation into Georgescu’s ties to Russia.
Other than battling the far-right and keeping the country from drifting closer to Moscow, the incoming government will need to face up to the challenge of decreasing the country’s budget deficit from the expected 8.6% of economic output this year—the EU's largest—to around 7% in 2025.
One way of achieving this could be tax hikes, which would be an early test for the cabinet’s popularity.
