Tragedy is a genre that isn’t talked about much in cinema, but Cristian Mungiu’s dark and compelling drama Graduation can only be talked about in this way. A whole defeated and compromised world crowds on to the screen, an open prison of people intimately interconnected through deals or favours or secrets: caught in a web of embarrassment and guilt. The first time I saw this at last year’s Cannes film festival it seemed a larger indictment of society, like Mungiu’s Palme D’Or-winning 4 Months, 3 Weeks and 2 Days. Now it looks more like the story of a father-daughter relationship, and the terrible, unavoidable, almost ritualistic loss of innocence hinted at in the title.

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The father is Dr Aldea, a decent, hardworking surgeon in the grim provincial town of Cluj-Napoca; as portrayed by Adrian Titieni, his face has become an exhausted, expressionless mask of overwork and suppressed anxiety; his wife Magda (Lia Bugnar) is clinically depressed and he is having a joyless affair with an ex-patient. Aldea has become disillusioned with the possibilities of improving corrupt and venal Romanian society – he reveals that he and his wife moved to Cluj in 1991, in a spirit of hope, shortly after the Ceausescu revolution. Now his pride and joy, and practically the sole point of his existence, is his teenage daughter Eliza (played by Maria-Victoria Dragus), an excellent student, widely and sincerely admired, who has been offered a scholarship at a British university, conditional on top marks in her final school exams. She is expected to coast through them. Aldea sees this as her one chance to get out of the hopeless ruin that is their homeland.

But then Eliza is subjected to an attempted sexual assault just outside the school gates: she escapes with an injured wrist but is too shaken up to do well in the exams. So the local police chief (played by Mungiu veteran Vlad Ivanov) tips off Aldea that the crooked vice-mayor Bulai (Petre Ciubotaru) could fix it for Eliza, by means of his connections with an exam-board official, but Aldea will be expected to move Bulai to the top of the queue for a liver transplant, and there will be more favours to paid to the police. Now Dr Aldea must violate his daughter’s innocence by explaining how this cheat will work, and how it is justified. And Eliza knows that her father is cheating on his wife.

Facebook Twitter Pinterest Favours to the police … Graduation. Photograph: Curzon Artificial Eye

Graduation is produced by the Dardenne brothers, and is arguably influenced by them, but has imagery and ideas derived from Haneke and Antonioni: a mysterious sense of outrage and group-guilt, which can be investigated through a surveillance camera. Aldea gets stones thrown at his apartment and his car. Perhaps the culprit is someone who objects to his extramarital affair, or perhaps it is the occult symptom of disquiet deep in the collective unconscious. Either way, it is part of something in the air. Could it be that even the attempted rape itself is part of this toxic karma, a poisonous expression of envy and resentment from deep in the community and Aldea is being punished for his misdeeds?

The most unwatchably difficult scenes are those between father and daughter, scenes in which – with no time to lose – Aldea has to reverse the existing pieties of working hard and staying honest. Now he has to tell her to toughen up, wise up, to work with the system because the alternative is to sink into the abyss of despair. He is already worried that she has an unsuitable relationship with a motorbike repair man. Wrongdoing, he must tell her, is not wrong. So she must graduate into the adult world of corruption. But it is in the larger cause of graduating away from their infected motherland.

Mungiu’s camera ranges all over this grim-looking Ceausescu-era town: the municipal buildings, forbidding flats, shabby hospital corridors, even a funicular-style cable-car station with views of the surrounding hills. There is a huge, incongruously idealistic mural in Aldea’s hospital, showing children who appear to be both grateful patients and possible future doctors and nurses. It is in queasy contrast to Aldea’s own shabby world. Aldea is restlessly adrift in his town, searching for the connections which will help his daughter, but also desperately searching for a way to escape them, to free himself from the net. It is a film of enormous power and moral seriousness.