Published October 9, 2012 By Natalie White Briefing CCPPR12RO Report available in PDF and Flash formats

Following World War II, Romania became a communist state within the sphere of influence of the Soviet Union, during which Communist party leader, Nicolae Ceausescu, assumed power in 1965. During his dictatorship, Ceausescu launched an aggressive austerity campaign to rid Romania of foreign debt and subsequent obligation to international financial institutions. This led to widespread oppression and high levels of poverty, sowing the seeds for revolution and Ceausescu’s eventual public execution in 1989. Becoming a democracy in 1991, Romania quickly advanced its market economy, enjoying high economic growth in the early 2000s. Romania joined the European Union in 2007 but has remained one of the EU’s poorest members.

The 2008 global recession provided a major setback to the Romanian economy, spurring economic and political turmoil. Romania has borrowed heavily from the International Monetary Fund, European Commission and World Bank to help survive the recession. With the new debt adding up to nearly €20 billion, severe austerity measures were put in place during 2010. Protests followed, as public sector workers experienced substantial wage cuts. With economic stagnation failing to abate, protests intensified in 2012 involving clashes with police. The civil unrest has divided the country politically with the president and prime minister becoming locked in political conflict. Romanians find common ground in their general mistrust of political and business leaders, as corruption and organized crime is endemic.

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