Romanian parliament rejects leader-designate

BUCHAREST – Romania’s opposition rejected prime minister-designate Lucian Croitoru yesterday, feeding scepticism the government will be able to approve a tough 2010 budget by an International Monetary Fund (IMF) deadline to release vital aid.

The opposition Social Democrats said they would support the approval of the budget to keep the €20 billion aid package afloat, but analysts said the December 10th deadline would be hard to meet with a presidential election looming this month.

No party is likely to endorse the politically unpopular economic cuts demanded by the IMF ahead of the election, which is expected to have no clear winner and so require a run-off vote on December 6th.

Cristian Mladin, analyst at BCR bank in Bucharest, predicted that budget wrangling would continue past December 10th. “So the budget could be passed by the end of the year, but it will be late and the tranche could be delayed until next year too.”

The IMF has demanded Romania pass a budget with a gap of 5.9 per cent of gross domestic product. If Romania achieves this, it will receive a €1.5 billion IMF loan tranche crucial to staving off further financial crisis. The leu currency was virtually unchanged after the vote, and dealers said the market had already priced in Mr Croitoru’s rejection.

The powerful opposition rejected Mr Croitoru, a nominee of centrist president Traian Basescu, by a vote of 250-189. Its preferred prime minister is provincial mayor Klaus Johannis, an ethnic German who has won praise for major restoration work in the Transylvanian city of Sibiu.

But Mr Basescu has made clear he will name a candidate only from his Democrat Liberal allies, making a new cabinet unlikely before November 22nd. – (Reuters)