Romania's centrist cabinet won the approval of lawmakers this Wednesday, ending a two-month political crisis. But, with only a slim majority in parliament, the government faces an uphill battle to steer the country towards economic recovery.
REUTERS - Romania’s centrist governing coalition won the approval of parliament on Wednesday on a promise to take unpopular measures to ward off the financial crisis and meet the requirements of an IMF-led rescue deal.
Analysts say the new cabinet faces one of the biggest challenges in the new European Union member’s post-communist history as prime Minister Emil Boc will be tasked with speeding up economic recovery and preparations for euro membership.
Analysts say Boc’s slim majority will solve a political crisis short term but may foster long term instability as after months of wrangling feuding parties look no closer to setting aside differences to tackle reforms needed to fight recession.
They say parliamentary endorsement for Boc’s team was a good news for the markets and could provide short-term support for the leu currency <EURRON=>.
“The fact that the next election is quite far away it’s clearly a positive, especially since other countries in the region have elections in 2010,” said Nicolaie-Alexandru Chidesciuc of ING Bank in Bucharest.
“But the problem with having a fragile majority is obvious. It’ll make reform implementation more difficult. Support comes from independents and their backing is not safe in longer term.”
Boc’s line-up is built around his Democrat-Liberal party and comprises an ethnic Hungarian party and independent allies.
He said his main priorities are the quick approval of a belt-tightening budget and meeting demands under a 20 billion euro IMF-led rescue package. A draft budget is expected to be finalised later on Wednesday.
“My priorities are: observing commitments under the accord with the IMF and the European Commission,” Boc told parliament.
“2010 will be also a difficult year ... we must be aware that before we reach a bit of wellness we have to undergo a bit of hardship ... so I will need to take responsibility for measures which are not necessarily popular but badly-needed.”
Commentators said Boc may struggle to get longer-term economic and justice reforms through parliament given a strong leftist opposition and possible absenteeism, a frequent problem in the Bucharest legislature.
But Boc’s task of winning parliament support for the timely passage of the 2010 budget through parliament by mid-January should be easy as his coalition has garnered a slim advantage of up to five votes more than the needed 236-seat majority.
His cabinet won parliament confidence with a stronger backing of 276 votes in favour and 135 against.
The proposed government of 17 ministers will face three-years with no elections if it is not ousted prematurely.
Date created : 2009-12-23