Monday, December 1, 2008

Social Democrats ahead in Romania poll

By Thomas Escritt in Bucharest

Published: November 30 2008 21:52 | Last updated: November 30 2008 21:52

Exit polls suggest Romania’s voters have handed the country’s Social Democrats (PSD) a convincing lead over their main rivals, the centre-right Democrat Liberals (PDL).

But even if the preliminary numbers are confirmed by the official results, which could take several days, the outcome of the elections is far from certain, and a lengthy period of coalition deal-making is in the offing.

An exit poll conducted by pollsters Insomar gave the PSD 36.2 per cent of the votes, a lead of almost six points over their nearest rival. The governing National Liberals came third in the poll, with 20.4 per cent of the vote.

“We know for sure who the losers are, but it’s difficult to conclude a real winner,” said Dorel Sandor, a political consultant.

Traian Basescu, Romania’s president, is required by the constitution to ask the PSD to form a government, but he has in the past said he would not accept Mircea Geoana, the party’s leader, as prime minister.

The National Liberals, who governed in coalition with the Democrat Liberals’ predecessor party until their acrimonious split two years ago, and since then have ruled as a minority government with the ad hoc support of the Social Democrats, are considered potential coalition partners for either of the two main parties.

But whatever the complexion of the final government, it is in for difficult times, as Mr Geoana acknowledged in a speech given after the exit poll results were released on Sunday evening.

Saying that Romania faced a “hard time ahead,” he said his supporters backed “our message of change in the country as we start down this long, hard road”.

A three-week stoppage at Dacia, the car manufacturer that is a subsidiary of France’s Renault, is only the most visible sign that Romania’s economy is shuddering to a halt as an eight-year export boom and asset price bubble is being brought to an end by falling demand from the country’s core west European markets.

Dacia reported domestic orders had fallen 40 per cent in October, and suppliers are facing the novel prospect of empty order books. Unemployment is expected to rise from its current low level of 7 per cent, a situation which could be exacerbated next year when some of the millions of migrant workers in southern Europe are forced to return home as the Italian and Spanish economies slow.

Like their rivals, the Social Democrats have promised a combination of public-sector pay rises, tax cuts and infrastructural spending as a means of economic stimulus. But with growth set to plummet to as low as 3 per cent next year from its current level of 7.5 per cent, and the budget deficit forecast to widen from this year’s level of 2.4 per cent over the next two years, the next government will have little leeway on spending.

Already, analysts are warning that Romania may have to follow its neighbours Hungary and Ukraine in turning to the International Monetary Fund for help financing its $75bn external debt.

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