December 14, 2009 / 6:18 PM / 10 years ago

UPDATE 2-Basescu declared victor in Romania presidential vote

* Court rejects complaint against runoff, says Basescu won

* Geoana concedes defeat, says suspicion of fraud remains

* Ruling opens way for govt talks, end to crisis

By Luiza Ilie and Marius Zaharia

BUCHAREST, Dec 14 (Reuters) - A Romanian court declared President Traian Basescu victor of a closely-fought election on Monday, handing him a second 5-year term and the power to end a political crisis that has threatened an IMF-led aid deal.

The Constitutional Court unanimously rejected a complaint by Social Democrat leader Mircea Geoana, who lost by a razor thin margin and accused the former sea captain incumbent of stealing a Dec. 6 runoff through widespread multiple voting and bribery.

The ruling opens the way to resolution of a months-old political crisis that has blocked policymaking, led to the fall of a Basescu-allied cabinet, and put a 20 billion euro ($29.33 billion) International Monetary Fund-led aid deal on ice.

Analysts said Basescu’s victory would lead to the quick formation of a new government but long-simmering animosity between the Black Sea state’s major political forces could create instability in the medium term.

That was evident in the response of Geoana, a former foreign minister and ambassador to Washington who had a wide lead in opinion polls ahead of the vote, when he conceded defeat but maintained his accusation that the vote was rigged.

“I accept the Court’s decision ... and I wish Traian Basescu good luck,” he told reporters, adding: “The suspicion of fraud in this election will follow Romania and our democracy.”

Basescu was not expected to make a statement on Monday.

A recount of 138,000 annulled votes did not change an official outcome giving Basescu a 70,000 vote edge.

The ballot was one of the most important here since the Black Sea state of 22 million overthrew and shot Stalinist dictator Nicolae Ceausescu 20 years ago this month.

The victor must quickly create a government and pass a cost-cutting budget to reopen the taps of international aid that it needs to finance its budget and claw its way out of an economic contraction expected to reach 8 percent this year.


Political analysts said Basescu, 58, would likely form a government quickly but could struggle to rein in an abrasive style that has caused clashes with rival parties and led to the collapse of two governments in his 5-year term.

He will now have three election-free years to influence long-delayed policies to overhaul Romania’s bloated public sector, a main reason the country is ranked the second poorest and most corrupt member of the European Union.

His first priority will be naming a new prime minister to replace Emil Boc, who has stayed on in an interim capacity since opposition parties toppled his cabinet with a no-confidence vote in October.

The administration must quickly negotiate a cost-cutting 2010 budget with the IMF, which sent a three-day mission to Bucharest on Monday, and unlock a 1.5 billion euro aid tranche put on hold in November.

Parties have already started talks. Basescu wants his Democrat-Liberal allies to lead a centre-right government, and the party has invited Geoana’s pre-election ally, the opposition Liberals, to form a coalition.

The Liberals said on Monday they would start talks with all parties but would not join a government unless the prime minister came from their ranks or was a well-known independent.

Analysts said Basescu’s endorsement of IMF-prescribed austerity measures aimed at cutting the 2010 budget deficit to 5.9 percent of gross domestic product, from 7.3 percent this year, could fan discontent.

The Fund has not specified measures, but sources familiar with the talks say they include a recommendation to cut up to 150,000 posts from the 1.3 million-strong public sector, which makes up a third of all jobs and is a millstone on the budget.

Analysts said Basescu would muster a majority and could even have a draft government plan in place by the end of the week, although clashes with rivals would persist in a landscape virtually identical the bitter pre-election battleground.

“The crisis and political deadlock have not changed,” said political analyst Stelian Tanase.

“The economic situation next year will be more dramatic than in 2009. The IMF is stringently asking for public spending cuts. Unemployment will rise and social tensions too.” (Writing by Michael Winfrey)

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