Romanian prime minister resigns after protests

AFP , Monday 6 Feb 2012

Romanian centre-right government resigns due to protests against austerity despite IMF and EU praise of economic reforms

Romanian Premier Emil Boc, front centre, leaves the headquarters of the ruling Democratic Liberal party in Bucharest, Romania, Monday, (Photo: AP).

Romania's president Traian Basescu on Monday started talks with political parties to name a new prime minister after the resignation of the centre-right government led by Emil Boc.

Boc quit Monday amid public anger at austerity measures and despite praise from the IMF and the EU for piloting drastic economic reforms.

"I have decided to tender the resignation of my government in order to defuse political and social tension and preserve Romania's hard-won stability," Boc told a cabinet meeting that was broadcast live.

The constitution requires that a member of the outgoing government be immediately appointed interim prime minister and Basescu named Justice Minister Catalin Predoiu to fill the slot.

Asked by journalists if he was willing to take on Boc's job, Predoiu said that he was ready to "assume any responsibility that would contribute to political stability and lead to changes in the Romanian society."

Analysts say Basescu may choose a technocrat or an independent to run the country until general elections scheduled in November and Predoiu's name is on a list of would-be prime ministers being circulated by the media.

Whoever is picked by Basescu will have 10 days to form a government and obtain parliament's confidence.

But the opposition Social-Liberal Union (USL) insisted it would not accept any formula short of early polls.

"Our option is to have early elections, this is the democratic solution adopted by all democratic countries at times of crisis," one of the USL leaders, Crin Antonescu, told reporters after meeting Basescu.

"We will not vote for any government whose only aim would be to buy time for the current ruling coalition,", he added.

Boc, 45, was Romania's prime minister since 2008, when the Balkan country plunged into severe recession after years of solid growth.

His government was forced to call on the International Monetary Fund (IMF) and the European Union for a 20-billion euro ($26-billion) lifeline in 2009. In exchange for the loan, Boc's government took drastic measures to curb public spending, cutting public wages by 25 per cent and freezing pensions in 2010.

Tens of thousands of jobs were axed in the public sector.

Last year, Romania concluded a second, precautionary-type agreement with the IMF and EU for a credit line of five billion euros, to be drawn on only in case of emergency.

After two years of recession, Romania registered economic growth in 2011 while the public deficit is expected to be under three percent of GDP.

On Sunday, a mission of the IMF and the EU praised Boc's government for the reforms carried out over the last two years.

"The authorities have made good progress in implementing programme policies in a very difficult external environment," the mission said in a press release.

"Continued fiscal consolidation has improved Romania's credibility," it added, citing a successful placement last week of a 10-year dollar bond.

But two years of austerity have impoverished the population and sent thousands of people in the streets across the country in January.

Boc admitted that while the spending cuts had started to bear fruit, the population has not felt the benefits yet.

The IMF and the European Union said on Sunday that they had trimmed Romania's 2012 growth forecast to 1.5-2.0 per cent, owing to international economic turbulence.

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