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Europe
Romania's government falls in confidence vote
Two-month-old government latest in wave of European administrations brought down by disputes over austerity measures.
Last Modified: 27 Apr 2012 18:10
Mihai Razvan Ungureanu has held the position of prime minister since February [Reuters]

Romania's opposition has undercut the centre-right cabinet in a confidence vote, raising the prospect of months of political turmoil and questions over an austerity campaign that has caused a wave of protests against reforms.

Prime Minister Mihai Razvan Ungureanu's two-month-old government on Friday became the latest in a string of austerity-minded ruling coalitions that have fallen across the European Union in disputes over spending cuts and tax hikes.

The defeat came ahead of another confidence vote, in the Czech Republic, whose budget-cutting cabinet is expected to survive but may find itself hamstrung by infighting among its scandal-plagued parties and widespread public anger over its policies.

Having replaced his predecessor Emil Boc, who resigned in January after anti-government protests in Romania turned violent, Ungureanu was defeated by the votes of 235 deputies, four more than required to topple his government.

Traian Basescu, the Romanian president, nominated leftist opposition leader Victor Ponta as the new prime minister, giving him ten days to present his governing programme and cabinet for parliament backing.

EU’s poorest

The European Union's second-poorest member slashed public sector salaries and raised sales taxes to put its economy on a more solid footing, but the measures have hit the poorest in the country of 22 million, which is only now emerging from a two-year crisis-induced recession.

Failure to back a new prime minister before a general election slated for November would prompt an early vote.

"The most likely version is that Traian Basescu will nominate Victor Ponta as prime minister," said political commentator Mircea Marian.

The International Monetary Fund, which with the EU has extended two loan packages to Romania, postponed a review there pending more information on the shape of a new government. The deal is crucial to Bucharest's battle to maintain investor confidence.

The currency, called leu, showed its biggest daily loss of the year after the vote. Usually protected by market fear over central bank intervention, it fell to match its all-time low of 4.4 against the euro.

"The end result seems to ... echo what we have been seeing in other countries in terms of a popular move away from the parties that are pushing for austerity," said Koon Chow, a strategist at Barclay's Capital.

"France, Holland, the Czechs - it's all connected."

Czech concerns

The cuts and public sector job losses have left millions of Romanians struggling to make ends meet every month and while the government plans to raise some wages again under the IMF's advice, the Fund says caution is needed to ensure stability.

Salaries average less than 400 euros a month. While unemployment is only 5 percent, many have left a country riddled with crumbling roads and patchy power and sewage services, prompting a 10 percent drop in population in the last decade.

"The current situation is clearly worse than before. We need at least 10 years to get back on track," said Gheorghe Stanciu, a 55-year-old legal adviser outside Bucharest's national theatre, the scene of protests that brought Boc's downfall.

Romania's example, a ruling centre-right party that has struggled to cling to power through repeated confidence votes that delay reforms aimed at healing the economy, may serve as a warning to Petr Necas, the Czech prime minister.

Necas threw out the smallest of the three parties in his coalition, Public Affairs, last week because of strained ties with one of its leaders who has been convicted of corruption.

Now he is counting on a breakaway faction from Public Affairs to support his cabinet in Friday's vote.

Source:
Agencies
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