News / Europe

Romania's Ruling Coalition Ruptures as Elections Loom

Reuters
Romania's Liberal party pulled the plug on the coalition government on Tuesday, in a break-up that might disrupt five years of economic reform backed by the International Monetary Fund (IMF) in the European Union's second poorest state.
 
The second-largest member of Prime Minister Victor Ponta's ruling alliance, the Liberals announced the split after crisis talks late into the evening in Bucharest. Its ministers will submit their resignations to the prime minister on Wednesday.
 
The move will force Ponta's Social Democrats to seek a vote of confidence from parliament within days which analysts expect them to win, while the Liberals will return to the opposition benches after being in power since May 2012.
 
The exit was the culmination of a series of rows between Romania's two biggest parties, mainly over ministerial appointments, as they jockey for position before European elections in May and a presidential election in November.
 
“We decided to put an end to this crisis, prolonged artificially by Prime Minister Ponta for two weeks,” Liberal Party head Crin Antonescu told reporters.
 
“This decision wasn't an easy one, we've been trying to avoid it through negotiations ... it was fair not to extend this festival of hypocrisy.”
 
Ponta did not immediately comment on the Liberals' exit, but previously said he would not resign if they left.
 
The infighting comes at a time when Romania should be capitalizing on an economic rebound that has seen growth jump to 5.2 percent in the last quarter, buoyed by a bumper harvest in 2013 and a rise in exports to a recovering Europe.
 
A weakened or unstable government could hamper reforms. High on the agenda for Romania is to speed up a process of selling off or restructuring inefficient state companies, as part of a 4 billion-euro ($5.49 billion) aid deal with the IMF.
 
“I see the danger of populism in this particular election year is enormous and the risk to the IMF deal seems big,” said Cristian Patrasconiu, a Bucharest-based political analyst.
 
“The government committed to the restructuring of inefficient state firms including in the railway sector this year, with layoffs on the cards,” Patrasconiu said. “I don't see the new government enforcing any pay cuts or pursuing any redundancies ahead of European and presidential elections.”

Going it alone
 
Political squabbles have often hampered Romania's progress in the 25 years since it threw off Communist dictator Nicolae Ceausescu, and its economy trails other emerging EU countries such as Poland and the Czech Republic.
 
Ponta's own alliance had been formed after it brought down a center-right coalition government in a confidence vote in May 2012. That government had imposed unpopular austerity measures to help Romania recover from a deep recession.
 
While Ponta's alliance with the Liberals had commanded a more than two-thirds majority in parliament, in recent weeks its rule has been overshadowed by a series of bust-ups.
 
Most recently, Ponta has blocked the appointment of a charismatic Transylvanian mayor as a new deputy prime minister. Earlier this month, a disagreement over a policy proposal to reschedule the bank debts of low-income borrowers prompted the Liberal party to sack its own finance minister.
 
The increased risk of a split in the government helped push Central European assets down on Tuesday, although movements were slight compared with last week's swings on the crisis in Ukraine.
 
Mihai Tantaru, an economist at ING bank, says a formal coalition breakup could push the Romanian leu towards year lows of around 4.55 to the euro.
 
Ponta still has the numbers to form another alliance with a functioning majority in parliament, albeit with fewer seats.
 
Splitting from the Liberals could strengthen his hand in some ways, as it would unshackle him from an agreement under which the Liberals put forward their nominee as the coalition's presidential candidate.
 
Ponta, who has seen his own policies repeatedly pushed back by his arch-rival, the outgoing president Traian Basescu, will now be free to put forward his own choice for president.
 
But going it alone could ultimately put the brakes on the Romanian government's push to liberalize its economy - a drive seen as vital if it is to catch up with its European peers.
 
Romania has pledged to stick to an IMF-agreed June 30 deadline to list a 15 percent stake in hydropower producer Hidroelectrica and also in coal-fired Oltenia, which operates lignite-fired power plants, in October.
 
It is also due to sell a 51 percent stake in state-controlled power distributor Electrica in an initial public offering in June.

You May Like

UN Watchdog Urges Israel to Probe Possible Gaza War Crimes

More than 2,100 Palestinians, most of them civilians, were killed in a 51-day war in Gaza, along with 67 Israeli soldiers and six civilians in Israel More

New Kenyan 'Thin SIMs' Poised to Transform African Mobile Money

Equity's new technology is approved in African nation for one-year trial, though industry leader Safaricom says thin SIMs could lead to data theft and fraud More

Solar's Future Looks Brighter

New technology and dropping prices are contributing to a surge in solar power More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Talks to Resume on Winter Gas for Ukrainei
X
Al Pessin
October 25, 2014 4:21 PM
Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Talks to Resume on Winter Gas for Ukraine

Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.

All About America

AppleAndroid