Thursday, October 8, 2009

SCENARIOS-Romania faces political deadlock until December

By Radu Marinas

BUCHAREST, Oct 7 (Reuters) - The Romanian parliament has scheduled a vote of no-confidence in the minority government of Prime Minister Emil Boc for Oct. 13, after his coalition with the Social Democrats fell apart last week.


Observers say that, regardless of whether his government survives, Romania will be mired in political instability until after a hotly-contested presidential election, scheduled for Nov. 22, with a likely run-off on Dec. 6. The political uncertainty spells concern over the future of Romania's 20 billion-euro ($29.4 billion) aid package from the International Monetary Fund and the government's budget plans for 2010, creating downward pressure on the leu currency.

Following are possible political developments in coming weeks.

PRESIDENT'S ROLE DECISIVE 


Main opposition parties, including the centrist Liberal Party (PNL) and the Social Democrats (PSD), have teamed up to take down the centrist government, accusing Boc of bungling the country's response to recession.

Even if they succeed next Tuesday, they will need to persuade President Traian Basescu, an ally of Boc's, to nominate a replacement prime minister.

Opposition officials say they want a technocrat to run a caretaker cabinet until after the election, naming central bank Governor Mugur Isarescu and respected mayor of the Transylvanian city of Sibiu Klaus Johannis among potential candidates.

Basescu has said little on the subject but as front-runner in the presidential race he hopes to have a decisive role after the election on a choice of any new prime minister. He wants to preserve the leading role of Boc's Democrat-Liberals (PD-L).

As such, he may nominate Boc again, raising the spectre of early parliamentary elections -- not scheduled until late 2012 -- although these would have to be held after the presidential ballot.

Snap polls would happen if parliament rejects Basescu's nomination twice.

WEAK CARETAKER GOVERNMENT

What's crucial for reform prospects is the presence of a strong government able to push through painful budget decisions, with the Social Democrats seen as the least fiscally restrictive.

However, both centrist groupings, the PD-L and the PNL, have a patchy record of fiscal responsibility, although the PD-L strongly backs the accord with the IMF.

The PSD also vows to maintain IMF-prescribed reforms, while the PNL candidate for president, Crin Antonescu, wants to renegotiate the deal.

If Boc's government survives Tuesday's vote, or Basescu delays a replacement nomination, the centrist politician will continue to govern but may face stiff opposition in parliament in conducting policy.

And under Romanian law, Boc's government would need to seek another parliamentary vote of approval by Nov. 15, a week before the presidential election. Again, even if it falls, it will be up to Basescu to nominate a replacement, and he may delay the decision.

Commentators say Basescu is likely to stand his ground and support Boc, in hopes of reinforcing his image of tough policy-maker.

AFTER THE ELECTION

The next president will play a pivotal role in negotiating a new government lineup in December.

If Basescu wins, the PD-L will likely seek a new coalition, with the PNL or the ethnic Hungarian minority, or try to rule alone.

The likely runner-up, PSD leader Mircea Geoana, would likely try cobble together a partnership around his leftist grouping.

Opinion polls show the PNL candidate is a distant third but survey results may change after the entry into the race of an independent but left-leaning Bucharest mayor Sorin Oprescu. (Writing by Justyna Pawlak and Radu Marinas; editing by Robin Pomeroy)

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