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Romanian government collapses

Posted: Fri Oct 02, 2009 7:23 pm
by Patush
Romania is facing economic turmoil after the country's coalition government collapsed following the resignation of one of the two ruling parties.
The walkout of nine Social Democratic Party ministers, who quit in protest over the sacking of one of their colleagues, could threaten the country's ability to meet the terms of an IMF aid package aimed at keeping the Romanian economy afloat.
Once one of the best performing in the European Union, the country's economy has suffered in the global recession and is in dire need of the external financial assistance promised by the IMF.
Last week the monetary organisation approved a £1.7-billion tranche of a total aid package worth £12 billion, in return for a Romanian commitment to overhaul its finances.
Bucharest has pledged to restructure its economy and slash its budget deficit from 7.3 per cent of GDP to 3 per cent by 2011, but with the country now facing a period of political instability doubts have surfaced over the country's ability to meet the IMF's stringent lending requirements.
Thursday's walkout stemmed from the decision by Traian Basescu, Romania's president who has strong links to the governing Democratic-Liberal Party, to approve the sacking of Dan Nica, the Social Democratic interior minister.
"All Social Democratic ministers, supporting Dan Nica, are announcing their resignation from government," Mircea Geoana, the party's leader, told reporters after an emergency party meeting.
"The president succeeded in triggering a political crisis." The Democratic-Liberal Party could now try and cobble together a new coalition in an effort to keep the reforms on line, but with it having few friends in parliament and widespread opposition in the country to its planned austerity measures this could prove beyond its capabilities.
The turmoil comes just weeks ahead of presidential elections in November with candidates from both the Democratic-Liberals and the Social Democrats vying for power. ... apses.html