Factbox-What happens after Romania's parliamentary election?

By Luiza Ilie

Romanians vote in a parliamentary election on Sunday, one week after an independent far-right candidate won the most votes in the first round of a presidential election, a result now under review by the country's top court.

Romania's legislature comprises the lower house and the senate. The Senate has 133 seats and the lower house 323. Romanians will elect lawmakers for both chambers on Sunday.

Here's what you need to know about Sunday's election in the country of about 19 million, which is a member of the European Union and the NATO military alliance.

CURRENT PARLIAMENT

Romania's leftist Social Democrat Party (PSD) currently has 32.5% of the seats overall in both chambers and their centre-right ruling coalition ally, the Liberal Party (PNL), has 23.4%.

The opposition centre-right Save Romania Union (USR) has 12.7% and the hard-right Alliance for Uniting Romanians (AUR) has 8.5%.

The ethnic Hungarian party UDMR has 12.9%. Representatives of minorities have 17 seats in the lower house, and they usually support the governing majority. Lawmakers currently unaffiliated with any party hold 12.9% of all seats.

To make it into parliament, parties need to get at least 5% of votes. The final number of seats each party gets will be decided after the ballot when the votes cast for the parties that didn't make the cut get redistributed.

PREDICTIONS

A Nov. 26-28 pre-election survey by pollster AtlasIntel put support for AUR at 22.4%, ahead of the PSD with 21.4%. The USR - led by presidential challenger Elena Lasconi - had 17.5% and PNL 13.4%.

A mid-November survey by INSCOP had put the PSD at 31.1%, the PNL at 16.2%, the USR at 12.7% and AUR at 20.7%.

Observers say the parliamentary election outcome is hard to predict amid uncertainty whether a presidential election run-off vote between independent far-right frontrunner Calin Georgescu and centrist Lasconi will still happen on Dec. 8.

The far-right grouping SOS Romania which is led by Diana Sosoaca, a member of the European Parliament, is expected to make it into parliament. It is unclear whether a new party, POT, an AUR splinter which supported Georgescu will meet the 5% threshold.

GOVERNMENT FORMATION

The president holds talks with parliamentary parties and designates a prime minister to form a government.

Political analysts expect mainstream parties will try to combine to forge a majority and block the hard right, but say negotiations could be protracted.

Retaining control of parliament will be a goal for pro-Western forces hoping it will serve as a counterbalance to Georgescu if he becomes president, they said.

The designated premier will then propose a cabinet line-up and governing programme and ask parliament for a vote of confidence.

MAIN ISSUES FACING ROMANIA'S NEXT CABINET

* 2025 budget plan and fiscal consolidation.

Romania is expected to end 2024 with a deficit of 8.0% of economic output. The country has been under the EU's excessive deficit procedure since 2020 - whereby it must present the European Commission with a multi-year plan to reduce the deficit back to below the bloc's ceiling of 3% of GDP.

Romania submitted a plan to Brussels in late October to cut its deficit below 3% of GDP within seven years, with ratings agencies and analysts expecting tax hikes.

* EU funds

With 2026 the last year for tapping EU recovery and resilience funds, the clock is ticking for Romania to enforce the required reforms to unlock further disbursements.

Separately, the country has made no progress in tapping cohesion funds made available to the bloc's poorer states.

Fiscal consolidation is key to ensuring Romania continues to receive billions of EU funds - some 70 billion euros ($74 billion) by 2027 - which are underpinning infrastructure investment and economic growth.

* Energy price cap

Romania's government enforced an energy support scheme for households, small businesses and industry that partially regulates its power and gas markets until March 2025.

The scheme, first introduced in late 2021 and changed several times - makes power and gas producers sell a part of their available output at regulated prices, caps bills for most customers and compensates suppliers for the difference.

It is unclear how the government will transition to deregulating the market and the impact it will have on bills and inflation.