Extremist George Simion Leads Romania's Presidential Race The BET index, Romania’s main equity benchmark, is currently down only 3% following the shocking rise of far-right candidate George Simion to the top spot in the presidential race. This reaction appears highly underpriced given the substantial political and economic risks now looming over the country. A sharper correction—closer to 10% or more—is not only justified but likely overdue if Simion maintains or expands his lead.
We’ve seen a similar scenario unfold before: when Călin Georgescu, also associated with extreme-right narratives, unexpectedly won the first round of a previous election cycle (eventually annulled by the Constitutional Court), the BET index tumbled nearly 10% before stabilizing after the court’s decision. The current 3% drawdown feels detached from both precedent and the present risk profile.
Investors Are Already Voting With Their Feet
Capital flight has begun. Multiple institutional investors have reported reallocating capital away from Romanian assets. The leu has started to devalue against both the euro and the dollar, and Romania’s external borrowing costs are spiking—an early sign of waning investor confidence.
If George Simion were to win the presidency, the country could face a downgrade back to junk status. Romania barely emerged from junk in the last cycle, and ratings agencies have been flagging political instability and lack of institutional reforms as key risk factors. A Simion presidency would severely aggravate these concerns.
Risk Premium Not Yet Reflected in Stocks
From a valuation standpoint, Romanian equities still price in too much optimism. Domestic consumption remains weak, inflation is sticky, and the cost of financing is rising. Against this backdrop, a populist president with an unpredictable economic agenda could trigger capital controls, undermine central bank independence, or alienate EU partners—all of which should justify a steep risk premium.
What Could Happen Next?
A swift correction toward 10–15% on the BET index is possible if polls solidify Simion’s lead.
Leu depreciation could accelerate if the central bank is forced to defend the currency amid political turbulence.
Foreign investors may avoid Romanian bonds altogether, driving spreads up even further and pushing the yield curve into inversion.
Conclusion
Markets have a tendency to underestimate political risk—until they can’t anymore. Romania’s current situation is one of those moments. A 3% drop in the BET is not enough. If George Simion wins the presidency or even enters the second round with strong momentum, Romanian assets could face a reckoning. Investors should watch closely—and consider reducing exposure before the correction becomes disorderly.
