Romania PM Boc quits after protests

BUCHAREST Mon Feb 6, 2012 8:03am EST

Romania's Prime Minister Emil Boc addresses the Parliament in Bucharest January 23, 2012. REUTERS/Bogdan Cristel

Romania's Prime Minister Emil Boc addresses the Parliament in Bucharest January 23, 2012.

Credit: Reuters/Bogdan Cristel

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BUCHAREST (Reuters) - Romanian Prime Minister Emil Boc resigned on Monday, giving way to mass protests against IMF-backed austerity measures and joining leaders of other European Union states felled by fury at spending cuts.

President Traian Basescu named Boc's justice minister, Catalin Predoiu, to replace him at the head of a government whose popularity is languishing in opinion polls ahead of a parliamentary election to be held by November at the latest.

The International Monetary Fund (IMF), which bailed out Romania in 2009 with a 20 billion euro ($26 billion) loan on condition of deep cuts in government spending, said it did not expect the deal to be affected by Boc's departure.

The cabinet will remain in place under Predoiu in a caretaker capacity until Basescu, who has often used his notionally figurehead post to play a significant role in politics, decides whether to ask Predoiu - or someone else - to form a new government that can secure a majority in parliament.

While the leftist opposition is calling for an early general election, its lack of a majority in the current legislature means that the president, who comes himself from Boc's centrist Democrat-Liberal Party (PDL), is likely to be able to secure parliamentary backing for his eventual nominee.

Whatever happens, the IMF mission chief in Bucharest, Jeffrey Franks, told Reuters: "I see no reason necessarily for this to have a material effect on the aid agreement. We have every expectation the agreement will continue."

Committed at some stage to adopting the euro single currency under the terms of its accession to the EU in 2007, Romania is the 27-nation bloc's second poorest member and is still struggling with the economic legacy of communist state control.

It was forced to seek IMF aid in 2009 to maintain investor confidence, prevent a run on the currency and keep borrowing costs at sustainable levels, even though its public debt to gross domestic product ratio was the fourth lowest in the EU.

"RELEASING TENSION"

While not suffering the difficulties that use of the euro created for leaders in the likes of neighboring Greece, Romania's government also struggled to finance itself without IMF support and found itself forced to make swingeing cuts that enraged public opinion and brought weeks of street protests.

"I took this decision to release the tension in the country's political and social situation, but also in order not to lose what Romanians have won," Boc said in a televised speech, his voice calm.

Basescu may prefer to name another PDL ally in the hope they can maintain the current coalition and regain support before the election. The president, a bluff former sea captain known for being outspoken, holds a position that is theoretically ceremonial, but is seen by many as the real seat of power and has made many major government policy announcements himself.

While the leftist opposition has demanded early elections, this would not be necessary if Basescu's nominee can command support in a parliament that was elected in late 2008 and in which the PDL and its allies still have a slender majority.

FREEZING PROTESTERS

After he cut public sector wages by a quarter and raised sales tax, Boc's ratings in opinion polls fell below 20 percent and thousands of Romanians braved freezing temperatures and heavy snow in the last month to protest.

They are angry about low living standards and what they say is widespread corruption, in a country where the average wage is less than 350 euros ($460) a month and some villages and even parts of Bucharest have no running water or electricity.

Many despair of the country's efforts to change since Soviet-backed dictator Nicolae Ceausescu was overthrown in 1989.

"I moved to Boston after the revolution and stayed there for 22 years," said Maria, a 53-year-old architect, who was walking through snow flurries to work in central Bucharest on Monday.

" When I came back, I realized that nothing changed while I was gone," she added, declining to give her full name.

The leu currency was largely unmoved by the decision and the cost of insuring Romanian debt was a touch higher.

Boc governed in a coalition with the ethnic Hungarian UDMR and a grouping of independents, which command a slim but functioning parliament majority.

"It's crucial that the new government maintain the reforms passed together with the IMF and the European Commission - if the next government stands by these reforms, Romania will be fine," said Raiffeisen economist Ionut Dumitru.

Victor Ponta, leader of the leftist Social Liberal Union (USL) which has more than 50 percent support in opinion polls, wants an early election but says he is also committed to working with the IMF.

"The USL wants to lead Romania towards better times in a much more professional and honest way than the Boc government did," Ponta told reporters after Boc's resignation.

($1 = 0.7621 euros)

(Additional reporting by Luiza Ilie; Editing by Alastair Macdonald)

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Comments (1)
Derzis wrote:
correction to this article: there were no “mass protests” in Romania. only small ones (100-200 people/city) and for 2 weeks every day.

many of those protesters were members of socialist parties from opposition

@Maria who moved to Boston – to say “nothing changed” after 20 years it`s a LIE or a misjudgement. EVERYTHING changed!

and few days ago the Romanian finance minister was declared by financial times ad the best in Europe

Feb 06, 2012 3:12pm EST  --  Report as abuse
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