Country in crisis
October 15, 2009
Following the collapse of Emil Boc's centre-right government in a no-confidence vote, economics expert Lucian Croitoru became Romania's new prime minister on Thursday. He now has ten days to form a government and secure the approval of parliament.
The appointment is the latest stage in an ongoing political and economic crisis in Romania. The most recent phase began on Tuesday, when Boc's Democrat Liberal party (PD-L) failed a parliamentary confidence vote, gaining less than 35 percent.
President Basescu also announced Thursday that the International Monetary Fund has postponed a mission to Bucharest to review progress under its 20 billion euro ($29.5 billion) aid accord until after a new government is found. This intensified concerns that Romania would not be able to meet the IMF's conditions for badly needed new loans.
A cool head in a financial crisis
President Basescu stressed that Croitoru was "independent" and well known for his "competence in economic matters" both at a national and an international level.
Croitoru is said to be close to the president but not affiliated with any party. He worked for the Romanian central bank for 11 years, and was a member of the team of experts who negotiated the IMF-led aid agreement earlier this year, a deal designed to rescue Romania's struggling economy from painful recession.
Croitoru also warned that the government budget deficit may top IMF-backed targets because of pressures stemming from upcoming presidential elections.
His appointment could help persuade the Fund to send a new chunk of the loans as part of its bailout.
On Wednesday, Basescu had warned, "If we fail to obtain the two tranches of loans, including that due between October and December, we risk finding it impossible to pay salaries and pensions."
Basescu urged the opposition to support his nomination. "The deepening political crisis is beginning to have economic effects," he said. "I call on all parties to understand that Romania urgently needs an effective government."
Opposition parties have own ideas
But despite Basescu's pleas to recalcitrant opposition parties, Romania's political crisis looks likely to continue as three of them, the Social Democrats (PSD), the Liberals (PNL) and the ethnic Hungarian UMD party had put forward their own candidate for the job: Sibiu Mayor Klaus Iohannis.
Iohannis was elected last year for a third term as the mayor of Sibiu, Europe's cultural capital in 2007. He is credited with turning the city into one of Romania's most popular tourist destinations thanks to the extensive renovation of its old centre.
If the three parties block Croitoru's appointment in ten days' time, the ensuing uncertainty could jeopardise crucial economic reforms agreed as part of the IMF-led bailout. But the opposition also accuses the president of having personal motives behind his nomination.
PSD head Mircea Geoana said Basescu intentionally put forward a candidate who cannot win in hopes of delaying the process past November 22, when presidential elections are scheduled.
Romania's troubled economy
Romania has gone through a sharp economic reversal in the past year, because of the global financial crisis and failed economic policies. It turned from being the European Union's fastest-growing economy and an attractive target for foreign investors to a problem zone in desperate need of aid.
The IMF, the World Bank and the EU agreed to lend Romania 20 billion euros in exchange for reforms, including an overhaul of its pension system and pledges to cut the public deficit, which is expected to top 7.3 percent of gross domestic product this year.
bk/Reuters/dpa/AFP
Editor: Andreas Illmer