Romania's political deadlock centers on Ilie Bolojan's status as caretaker prime minister following the May 5, 2026, no-confidence vote that ended his pro-EU coalition after just 10 months. The 281-4 parliamentary majority reflected the Social Democratic Party's withdrawal from the four-party government amid disputes over austerity measures tied to EU recovery funds, followed by alignment with far-right opposition to force the ouster. Since then, efforts to install a replacement have stalled amid coalition negotiations and party fractures, leaving Bolojan's interim administration with limited powers. Parliament's summer recess and the August 31 deadline for key legislation tied to roughly €8.5 billion in EU disbursements add pressure, while constitutional rules allow new elections if no government forms within 60 days of two failed investiture attempts. Trader sentiment tracks these formation timelines and legislative risks.