Coalition Government in Romania Collapses

The coalition government in Romania has collapsed following the resignation of the Social Democratic Party (PSD) in protest at the dismissal of Interior Minister Dan Nica.

According to the BBC Romanian Prime Minister Emil Boc, who is President of the center-right Democratic Liberal Party (PD-L), dismissed Mr Nica over remarks he made regarding the probability of fraud in next month's Presidential election. It is not clear from reports the total number of PSD ministers who have resigned but Bloomberg states that initially the nine remaining ministers from the PD-L will fill the vacant posts for a period of 45 days, in accordance with the constitution. There will then be a vote in the Romanian parliament to decide if the ministers are to assume the positions on a permanent basis. The Romanian constitution means no elections for parliament can be held during the six months prior to a Presidential election, hence the need for interim ministers. In March the International Monetary Fund, the European Union and the World Bank agreed a €20 billion ($29 billion) loan to enable Romania to cope with economic problems created by the global financial crisis. The impact of the global crisis on the country is perhaps best illustrated by the fact that in 2008 the Romanian economy grew by 7.1 per cent, a faster growth rate than any other country in the EU. However in the second quarter of 2009 the country's economy shrunk by 8.7 per cent, with an annual decline of 8.5 per cent forecast by the IMF and the Romanian government for 2009. All of which, combined with the ministerial resignations, has prompted Prime Minister Boc to issue an assurance to ambassadors in the EU. AFP quotes him as saying to the ambassadors:

Romania will respect all its financial obligations towards the international institutions such as the International Monetary Fund and the European Commission

The loan agreed in March enables Romania to pay workers in the state sector but sets certain conditions, such as the country's budget deficit being kept within 7.3 per cent of GDP. To meet that particular condition job cuts are due in the public sector during 2010 and at some stage all of the state's employees will be required to take 10 days leave without pay. Romanian President Traian Basescu, now officially an independent but once affiliated with the PD-L, suggested a compromise in order to save the 10-month-old coalition government but his proposal that a "neutral person" be appointed to replace Mr Nica was not acceptable to the PSD, a party led by Mircea Geoana. Bloomberg is reporting that Mr Basescu is not planning to seek reelection as President in November, whilst the BBC says he will run again for office and will be backed by the PD-L. The remarks that led to Mr Nica's dismissal involved him saying that the PD-L had rented ever available bus on the day of the Presidential election in November, presumably for the whole of the country, so that voters could travel from one polling station to another and cast their vote more than once, something that is apparently common in Romanian elections. In turn Mr Nica has been criticized by Mr Boc for allowing crime in the country to escalate.