* Crisis-hit Romanians fear losing jobs and homes
* Presidential campaign avoids painful measures to come
* Short-term agony seen tradeoff for long-term growth
By Marius Zaharia
BUCHAREST, Nov 13 (Reuters) - Florentina Craciunescu rues the day she took out a loan during Romania's boom years, when borrowers assumed huge debts believing that living standards would soon approach those of the richer European Union nations.
Now the economy is expected to shrink by up to 8 percent this year, Craciunescu's crisis-wary bank has raised its interest rates, and she fears she could lose her job due to state budget cuts agreed with the International Monetary Fund.
A political crisis that has shut down reforms, endangered the 20-billion-euro IMF-led bailout and threatened to push the country into deeper turmoil has made things worse.
So Craciunescu, a 29-year-old policewoman, is looking forward anxiously to the first round of a presidential election on Nov. 22, hoping the victor can bring some economic relief but worried by what this may entail.
"I can barely live with my expenses and ... I am afraid of being laid off," she said. "I hope the future president will help the country pull out of this crisis."
Expected to be chosen in a Dec. 6 runoff, the president can appoint a new prime minister who would then have up to three years of election-free rule to tackle the deep reforms which governments since the 1989 fall of communism have ignored.
But the price of solid long-term economic growth is likely to be severe belt-tightening, such as IMF-backed plans to sack up to 150,000 of Romania's 1.3 million public workers, freeze state wages and cut pensions.
So far, the main presidential candidates have walked a line of endorsing the austerity measures but distancing themselves from any gruesome-sounding details.
All of them have offered some relief. Incumbent Traian Basescu, the frontrunner in most recent opinion polls, foresees lower taxes in 2011. Leftist leader Mircea Geoana, who generally lies in second place, has promised relief for indebted households for a year and to avoid public layoffs during the recession.
Neither, however, has suggested how to tackle the public budget deficit, which Romania must cut to 5.9 percent of GDP in 2010 from over 7.3 percent this year, as per IMF demands.
"None of them will say painful measures are needed to fix the crisis and they are all promising moves that look impossible," said Catalin Stoica of pollster CURS.
As hard landings go, Romania's has not been as bone- crunching as those in fellow ex-communist EU members Lithuania or Latvia, where GDP is likely to shrink 18 percent this year.
But Romania -- once called "the shopping centre of Europe" by a central banker due to a flood of imported Rolexes, Porsches and other pricey goods on a tide of foreign-backed lending -- is still experiencing one of the sharpest reversals in Europe.
Bank lending was the main driver that helped gross domestic product almost to double from 2004 to 2008, but credit growth is just 2 percent this year, down from 50 percent in 2007.
Meanwhile, a selloff in emerging Europe in late 2008 and investor disdain at slow reforms and bickering among politicians have pushed the leu currency down 20 percent versus the euro.
This could get worse if Romania does not quickly enact reforms, which are central to the IMF deal as well as stability and an eventual way out of crisis.
"There is no other way than short-term pain if we want to achieve sustainable growth," said Nicolaie Alexandru-Chidesciuc, ING Bank's chief economist in Bucharest. "If political actors realise this and take quick action, we might avoid a correction driven by market forces, which would be more painful as markets tend to over-react."
PITY THE LEU
The leu's fall has made imports much more expensive in a country with just 46 percent of the EU average gross domestic product in purchasing power terms.
Another big problem is that Romanians took out loans denominated in euros, thinking the leu would appreciate as living standards converged with those of richer EU members.
Just two years ago, it was common for people to commit to payments worth 65 percent of their monthly income to buy flats in dilapidated communist-era blocks at near western prices.
Euro zone interest rates were much lower than those of leu-based debt and people believed incomes would quickly rise.
That was the story of Viorel Covrig, a 36-year-old electrician who took on a 100,000 euro mortgage three years ago. At first, his repayments were just 300 euros a month. They have now doubled in local currency terms to about 2,000 lei, or about 80 percent of his family's total income.
"I was dreaming that in a few years we would have salaries close to EU levels and would not have to be ashamed of coming from a poor country," he said. "If I could turn back time, I'd rather live in a rented apartment."
Covrig has lost hope in politicians and plans to cast a blank ballot on Nov. 22. "With the current economic and political situation in Romania, I certainly don't see light at the end of the tunnel," he said. (Additional reporting by Ioana Patran)