Asset Class Strategy: Political Risks Rising

Macro Outlook: Romania's political outlook took another turn for the worse in early July, following parliament's decision to temporarily suspend President Traian Basescu, while it awaits an upcoming constitutional court decision which could make it easier for the government to impeach the president. With the European Commission expressing concerns about the recent political events, the new government of Prime Minister Victor Ponta is running the risk of losing multilateral and bilateral support, which could have dire consequences for an economy that was already on a precarious footing.

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