Bloomberg News

Merkel Backing of Austerity Ally in Romania Prompts Foe’s Rebuff

July 09, 2012

German Chancellor Angela Merkel intervened in a Romanian power struggle, backing President Traian Basescu against efforts by Prime Minister Victor Ponta to impeach him over budget-austerity measures.

Merkel spoke by telephone today to Basescu after the country’s parliament, dominated by Ponta’s party, voted on July 6 to suspend the president for exceeding his mandate with measures including budget cuts in 2010 and set a July 29 referendum on his removal from office.

“The chancellor views it as unacceptable that basic principles of the rule of law are violated in a European Union country,” the German government press office said in a statement announcing the phone call. Romania, like all EU governments, must abide by common values, according to the statement.

Romania’s governing Social Democrats and Liberals have eased the impeachment process, lowered the bar for winning a referendum and limited the Constitutional Court’s power to keep it from impeding suspension. Basescu’s Democrat-Liberal Party has challenged the changes in the high court. The political turmoil pushed the leu to a record low.

“I don’t think Mrs. Merkel will be the one voting in Romania in the referendum,” Ponta told reporters in Bucharest today. Merkel and her party back Basescu “because they are the only supporters of austerity in Europe,” he said.

“I don’t think anyone can challenge the right of the Romanian people to say their opinion about the president,” Ponta said. “There have been changes in France, in Spain. This is democracy.”

Basescu’s party cut state wages by 25 percent and raised taxes to narrow a budget deficit and meet pledges to the International Monetary Fund and the EU.

Envoys of the IMF, the EU and the World Bank are due in Romania this month to review its progress under a 5 billion-euro ($6.2 billion) accord secured last year to shield the country from the euro area’s sovereign-debt crisis. Romania is not a member of the currency union.

To contact the reporters on this story: Tony Czuczka in Berlin at aczuczka@bloomberg.net; Andra Timu in Bucharest at atimu@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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