Tuesday, December 11, 2012

Romanian president weighs options for PM after vote

(Reuters) - Romanian President Traian Basescu weighed his options for a new prime minister on Monday and could seek to split his rival Victor Ponta's leftist alliance, even though it scored a resounding electoral victory.

Ponta's Social Liberal Union (USL) won up to 60 percent of votes in Sunday's parliamentary election, results showed. The electoral system could give it an even bigger share of seats in the Balkan country's parliament, putting Ponta in a strong position in a power struggle with the right-wing Basescu.

Basescu had said he would not ask Ponta to be prime minister again after the USL failed to impeach him in July. While he has since softened his tone, he could try to split the USL by naming someone else from the alliance of leftists and liberals.

Any uncertainty over a new government would delay talks over a new deal with the International Monetary Fund to replace a 5- billion-euro ($6.5-billion) agreement expiring in early 2013.

The leu currency and Bucharest stocks were a touch lower and bond yields rose slightly, but dealers said they may rally if a new government is in place quickly.

"We may expect any surprise coming from President Traian Basescu in nominating the next prime minister. It may not be Mr. Ponta, but definitely Basescu would have no choice but appoint someone from inside the USL," said Adrian Basaraba, politics professor at the University of Timisoara.

On many indicators, Romania trails other ex-communist neighbors like Hungary, Poland and the Czech Republic.

Corruption is rife, its roads and rail are outdated and it cannot provide reliable basic services such as running water and electricity to all its 19 million people nearly a quarter of a century after the fall of dictator Nicolae Ceausescu in 1989.

Basescu has not yet commented on the election result. Ponta has said he hopes the vote will end the political "civil war".

"I'm just waiting for the presidential decree to appoint me," Ponta told television station RTV.

Ponta's party has promised to roll back the previous centre-right administration's austerity policies by cutting taxes and raising salaries, though it has limited room to do so given expectations of growth this year of just 0.4 percent.


Romania joined the EU in 2007 but remains the second poorest and effectively a second-tier member, excluded from the passport-free Schengen zone because of corruption concerns, and with its judicial system subject to special monitoring.

For its attempt to impeach the president, the USL came in for harsh criticism from the European Union and United States, which accused it of undermining the rule of law. Political analysts say that could discourage it from more radical steps.

In Oslo, European Commission President Jose Manuel Barroso told Reuters there would be no difficulty working with Ponta.

"There was concern expressed by us regarding some decisions taken in Romania, but I think Prime Minister Ponta addressed our concerns and he has shown his commitment to correct things that were from our point of view inappropriate," Barroso said.

In recent weeks the outspoken Basescu has stopped short of saying he would reappoint Ponta - saying only that he would seek someone to act in the country's best interest.

Given Sunday's emphatic win, it would be difficult for the former sea captain to name anyone other than Ponta without appearing to undermine the constitution and rule of law himself, which could prompt the USL to try and impeach the president again and another bout of uncertainty.

With 96 percent of votes counted, Basescu's Right Romania Alliance (ARD) allies were in second place on 17 percent and populist Dan Diaconescu on 14 percent, the election bureau said.

"Our wish is to consider that this day puts an end to a civil war...which has destroyed a large part of Romania, destinies, lives and hopes," Ponta said late on Sunday.

An electoral system which tends to favor larger parties could give the USL an even bigger proportion of seats in parliament. With two-thirds of seats it could change the constitution, as Viktor Orban has done in neighboring Hungary.

But political analysts said it may prefer not to be too confrontational given the criticism it faced from the EU over the attempt to impeach Basescu, when it was forced to back down on some proposed changes to laws.

"Perhaps he will delay things a little, but ultimately I believe the president will nominate Ponta," said Sergiu Miscoiu, an analyst with the CESPRI political think tank.

(Additional reporting by Luke Baker and Balazs Koranyi in Oslo; Editing by Michael Roddy)

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