Romania’s coalition government shattered after 14 months in power as the Liberal Party withdrew and forced Socialist Prime Minister Victor Ponta to shore up a ruling majority to back a new cabinet by March 4.
The Liberal ministers and their deputies were replaced by interim picks from Ponta’s Social Democrat party, President Traian Basescu, who approved the changes, said in Bucharest today. He said the administration was “unstable” with the temporary appointees, while Ponta, who can still count on two smaller parties for a majority, said he planned to have a new government in place next week.
“Next week we will have a new stable government in force, which will allow us to go ahead with our governing program,” Ponta said before a government meeting in Bucharest today.
Bickering between Ponta and Antonescu, potential rivals in a November presidential election, has deepened a political crisis in the Black Sea country of 20 million. The government is struggling to fulfill the fiscal terms of a 4 billion-euro ($5.5 billion) bailout from the International Monetary Fund and the European Union.
“Through their dispute, the two political leaders have put Romania in a difficult position at a time when the entire region is going through a crisis,” Basescu told reporters in Bucharest today. “As the premier hasn’t finished negotiations with other parties for a majority in parliament, I agreed to immediately sign the decrees appointing the new interim ministers.”
Ponta is seeking to firm up what he called a “fragile” majority in parliament with the help of the ethnic Hungarian alliance. Its deputy chairman, Laszlo Borbely, said the party prefered to take part in the government rather than simply supporting it in parliament with its votes.
“If one is at the government’s table, negotiations take on a different shape,” Borbely was quoted as saying by Hungarian state news agency MTI.
The leu, which has lost 1 percent this year, weakened 0.1 percent to 4.5176 per euro at 4:40 p.m. in Bucharest, data compiled by Bloomberg show. The yield on the government’s 2024 dollar bonds fell three basis points, or 0.03 percentage point, to 4.64 percent.
“Whether parliament survives until 2016 when the next parliamentary elections are scheduled is uncertain,” Royal Bank of Scotland Group Plc strategist Abbas Ameli-Renani wrote today in an e-mail. “The small parliamentary majority will be sufficient for Ponta to avoid early elections in the short-term.”
While Antonescu said the Liberals will ask for Ponta to step down, the Liberal leader sees little chance of that happening and predicts his party will remain in opposition.
The Liberals, the only opposition party with enough votes to initiate a no-confidence motion against the government, will use that weapon “wisely,” Antonescu said.
The remaining governing coalition will probably secure support from non-affiliated and minority-representing lawmakers to form a new majority, analysts at Raiffeisen Bank Romania SA, including Ionut Dumitru, said today in a note.
The ruling coalition won the 2012 election amid public anger over austerity measures imposed by Basescu. Economic growth accelerated to a better-than-expected 5.2 percent in the fourth quarter, among the fastest in the EU.
Three weeks ago, a dispute erupted between Ponta and Antonescu over a proposed cabinet shuffle, with the Liberals seeking to replace four ministers and a deputy premier.
“The current tensions serve as a reminder that Romanian politics are notoriously volatile and continue to cast a cloud,” William Jackson, an emerging-markets economist at Capital Economics Ltd. in London, said by e-mail. “Although growth in Romania last year was faster than most expected, the economy remains fragile.”
Once allies, Ponta and Antonescu -- the latter selected as the coalition’s presidential candidate -- have accused each other of having separate plans for the Nov. 2 election.
Ponta said he thinks Antonescu wants to run for the job by opposing the government to boost his chances, while Antonescu said the Social Democrats, Romania’s biggest party, plan to push their own candidate, without giving any names.
Romania’s president has the right to name governments and reject laws. Antonescu is leading the presidential race with about 26 percent support, according to an Avangarde poll of 1,500 people in January. Ponta would get 22 percent if he were to run. The survey had a margin of error 2.5 percentage points.
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