Thursday, October 15, 2009

Romania president rejects technocrat cabinet plan


BUCHAREST, Oct 14 (Reuters) - Romania's president rejected an opposition proposal on Wednesday to nominate a government of technocrats to replace a centrist cabinet ousted by parliament.

In a move likely to prolong political deadlock caused by the split in the ruling coalition earlier this month, Traian Basescu said Romania needed a government of politicians accountable to voters to effectively fight painful recession.

Basescu said a national unity government with the backing of all main political groupings, including the ousted centrists and their former coalition partners the Social Democrats, would be the best option.

'I don't believe in a technocrat government. Restoring confidence in Romania can be done solely through a political government,' Basescu told party chiefs before a new round of consultations after Tuesday's government collapse.

The crisis has sparked concerns over Romania's ability to meet conditions for a 20 billion euro aid package from the International Monetary Fund, vital to keep the economy afloat.

Following the government collapse, Standard & Poor's reiterated warnings that Romania's ratings could come under pressure if political woes lead to problems with the IMF.

The damage is already showing. The Romanian leu traded near the previous session's seven month lows against the euro, while a government official said a planned eurobond issue would likely be postponed.

Commentors say the conflict is a result of tactical scheming by political groupings ahead of November's presidential election that pits opposition groupings against the outgoing cabinet of Prime Minister Emil Boc, a close ally of Basescu's.

Romania's three opposition parties agreed on Wednesday to back an ethnic German as their candidate for prime minister

Klaus Johannis, 50, won praise for his managerial skills when he ran restoration works as mayor of Sibiu, the picturesque Transylvanian city established by German settlers in the 12th century which was European Capital of Culture in 2007.

Basescu said he might accept a technocrat prime minister, including Johannis, only if he proposed a cabinet of politicians, not independents.

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