Bloomberg News

Romanian Premier-Designate Unveils Cabinet, Seeks Approval

February 09, 2012

(Updates with comments from Finance Minister nominee in last paragraph.)

Feb. 8 (Bloomberg) -- Romanian Prime Minister-designate Mihai-Razvan Ungureanu nominated a 17-member government, replacing the finance and economy ministers, as he seeks to secure the backing of the ruling coalition ahead of a confirmation vote in Parliament.

Bogdan Dragoi, 31, a former deputy finance minister, will be Finance Minister, and Lucian Bode, 38, Economy Minister, Ungureanu said in a televised speech from Bucharest today. He kept Defense Minister Gabriel Oprea and Foreign Minister Cristian Diaconescu as holdovers from the previous Cabinet.

“This is a young government that deserves trust and I think we’re ready to prove that this is a change of the political generation and of government principles,” Ungureanu, 43, said. “I hope we’re going to have a good vote tomorrow.”

The premier-designate said he will ask Parliament for a confidence vote tomorrow to approve his Cabinet. He expects to be backed by a majority coalition of the Liberal Democrats, the ethnic Hungarians, the Independents’ party and the minorities.

The Romanian leu, the seventh-worst performer among 25 emerging-market currencies tracked by Bloomberg so far this year, rose 0.2 percent to 4.3482 per euro as of 4:01 p.m. in Bucharest, after posting two days of losses following the resignation of the government. The Bucharest Stock Exchange’s BET index rose 1.2 percent to 5018.57.

Next Step

If Ungureanu, a former foreign minister under a Liberal government from 2004 to 2007, fails to get the backing of lawmakers, the president will nominate another candidate. A second failure to win support may trigger early elections, according to the constitution.

Romanian President Traian Basescu nominated Ungureanu on Feb. 6 as a candidate for premier, hours after his political ally and Liberal Democrat leader Emil Boc resigned to ease political and social pressure stemming from anti-austerity nationwide protests.

“The Liberal Democrat lawmakers ended talks with Ungureanu today and we decided to fully support the new government and Parliament will convene to hold the vote tomorrow,” Boc, head of the Liberal Democrats, told reporters in Bucharest today.

Falling Support

Support for the coalition headed by Boc had fallen by more than half after a 25 percent public-sector wage reduction and a value-added tax increase prompted the most violent protests in more than a decade on Jan. 14 and Jan. 15, injuring 60 people.

The government pledged to narrow the budget deficit to 1.9 percent of economic output this year from 4.35 percent in 2011 to meet the terms of a loan accord with the International Monetary Fund and the European Union.

The country’s economic growth will probably slow to as low as 1.5 percent this year, after output grew an estimated 2.5 percent in 2011, on declining exports to western Europe and weak domestic demand, according to IMF forecasts.

“Our top priority is to ensure economic growth through investments and European-fund absorption,” Dragoi told coalition lawmakers during a parliamentary hearing today. “We’ll seek to attract 6 billion euros ($8 billion) in European funds this year, which roughly means about 5 percent of GDP.”

--Editors: Alan Crosby, Zoe Schneeweis

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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