King Michael I was the last monarch behind the Iron Curtain to lose his throne. In March 1945, political pressures forced King Michael to appoint a pro-Soviet government dominated by the Romanian Communist Party. Under the communist régime King Michael functioned again as little more than a figurehead. Between August 1945 and January 1946, during what was later known as the "royal strike", King Michael tried unsuccessfully to oppose the first communist government led by the communist Prime Minister Petru Groza, by refusing to sign its decrees. In response to Soviet, British, and American pressures, King Michael eventually gave up his opposition to the communist government and stopped demanding its resignation.
In November, 1947 King Michael I travelled to London for the wedding of the future Queen Elizabeth II, an occasion during which he met Princess Anne of Bourbon-Parma, who was to become his wife. According to unconfirmed claims by Romanian royalists, King Michael did not want to return home, but certain Americans and Britons present at the wedding encouraged him to do so; Winston Churchill is said to have counseled Michael to return because "above all things, a King must be courageous". According to his own account, King Michael rejected any offers of asylum and decided to return to Romania, contrary to the confidential, strong advice of the British Ambassador to Romania.
However, on December 30th 1947, King Michael I was forced at gun point (by either Petru Groza or Gheorghe Gheorghiu-Dej, depending on the source) to abdicate Romania's throne in his own Royal Palace which was surrounded by the Tudor Vladimirescu army units loyal to the communists. Later the same day, the communist-dominated government announced the 'permanent' abolition of the monarchy and its replacement by a People's Republic, broadcasting the King's pre-recorded radio proclamation of his own abdication. On January 3, 1948, Michael was forced to leave the country, followed over a week later by Princesses Elisabeth and Ileana, who collaborated so closely with the Russians that they became known as the 'King's Red Aunts'.
There are several accounts as to why King Michael I abdicated. As recounted by Michael himself, the communist prime-minister Petru Groza had threatened him at gun point and blackmailed him that the government was to shoot 1,000 arrested students if King Michael didn't abdicate. In an interview with The New York Times from 2007, Michael recalls the events: “It was blackmail. They said, ‘If you don’t sign this immediately we are obliged’ — why obliged I don’t know — 'to kill more than 1,000 students' that they had in prison”. According to Time magazine, the communist government threatened Michael that it would arrest thousands and steep the country in blood if he did not abdicate.
But according to the book Special Tasks: The Memoirs of an Unwanted Witness - A Soviet Spymaster, the autobiography of the former leader of the Soviet intelligence agency NKVD, major general Pavel Sudoplatov, the deputy Soviet foreign minister Andrey Vyshinsky personally conducted negotiations with King Michael for his abdication, guaranteeing part of a pension to be paid to Michael in Mexico. According to a few articles in Jurnalul Naţional, Michael's abdication was the result of his negotiations with the Communist government, not of a blackmail, which allowed him to leave the country accompanied by the goods he requested and by some of the royal retinue. However, considering the unreliability of this source, as well as several other sources that contradict such allegations, one is inclined to discount such a possibility as highly improbable.
According to the Albanian communist leader Enver Hoxha, who recounts his conversations with the Romanian communist leaders on the king's abdication, King Michael was threatened with a pistol by the Romanian Communist Party leader Gheorghe Gheorghiu-Dej rather than Petru Groza so as to abdicate - recount which lacks any factual evidence. He was allowed to leave the country accompanied by some of his entourage and, as confirmed also by the Soviet leader Nikita Khrushchev recounting Dej's confessions, with whatever properties he desired, including gold and rubies. Hoxha does say in his book that the Romanian communist leaders had threatened King Michael with their loyal army troops, which had encircled the royal palace and its troops loyal to King Michael.
At 30 December 1947 was proclaimed the People's Republic of Romania and the day is celebrated as Republic's Day.