Tuesday, December 9, 2008

Romanian Ex-Communists Seek Talks With Liberal Democrat Party

By Adam Brown

Dec. 8 (Bloomberg) -- Romania’s Social Democrat Party, which won the second-highest number of seats in Nov. 30 elections, said it would consider talks with the first-placed Liberal Democrat Party about forming a government.

The ex-communist Social Democrats and the Liberal Democrats, who back President Traian Basescu, failed to gather a majority in weekend talks with the third-placed National Liberal Party and may start talks with each other, said Mircea Geoana, leader of the Social Democrats in Bucharest today.

Political wrangling to form a government threatens to delay programs to boost economic growth and job creation, including a 10 billion-euro ($12.6 billion) stimulus plan intended to take effect in January as the global economic crisis hammers Romanian assets.

The leu has weakened more than 7 percent against the euro and more than 25 percent against the dollar in the past year as international investors withdraw money from countries seen as carrying higher investment risk. The benchmark BET stock market index has declined about 67 percent at the same time.

The elections gave the Liberal Democrats 115 seats in the 334-member lower house, one more than the Social Democrats. The Liberals won 65 seats, putting then in a position to decide which of the two larger parties should get a majority.

The Social Democrats indicated today they may consider skipping further talks with the Liberals and try to forge an alliance with their rival Liberal Democrats.

The Liberals have said they will only ally with one of the two parties if they can name the premier and their allies promise to implement economic programs such as the stimulus package. Both larger parties rejected giving up the right to name the premier and accepted most Liberal economic plans.

To contact the reporter on this story: Adam Brown in Bucharest at abrown23@bloomberg.net;

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