* Nurses, teachers rally aginst government
* Romania holds parliamentary election in 2012
* Romanians angry over bailout austerity
* Romanian president says some protesters justified
By Ioana Patran
BUCHAREST, Jan 24 (Reuters) - Thousands of Romanians rallied in Bucharest on Tuesday to demand the government resign over its tough austerity measures, the latest in a wave of protests that have led to some concessions but no change in policy.
The hardship caused by austerity measures passed in 2010 to keep a 20-billion-euro International Monetary Fund-led bailout on track has until recently provoked little of the unrest in Romania that has been witnessed in countries like Greece.
The ruling party’s popularity has slumped months before a parliamentary election, expected in November, and anger at public sector jobs and pay cuts, as well as an increase in sales tax has mounted.
At rallies last week on Bucharest’s University Square, one of the scenes of the 1989 anti-communist revolution, police fired tear gas and demonstrators threw bricks and firebombs.
Earlier on Tuesday, about 2,000 trade unionists, teachers, nurses and retired army officers rallied outside government headquarters to demand Prime Minister Emil Boc and his close ally President Traian Basescu resign.
“I want to regain my dignity, I want this dictatorship formed by the president and the prime minister to fall,” said Otilia Dobrica, a kindergarten teacher and part-time secretary who earns 1,400 lei ($420) a month.
Demonstrations bringing together students, pensioners, public sector workers and professionals have spread across the country in the past two weeks.
On Tuesday evening, as many as 1,000 protesters gathered in University Square, one of the largest turnouts in 12 straight days of protests in Bucharest. Demonstrators carried flags, crosses and cardboard hearts, and chanted “Down with Basescu” and “Boc - Instant Resignation”.
Boc has made some concessions, sacking his foreign minister for making insulting remarks about protesters, and reappointing a popular health official whose resignation brought people onto the streets, but he and Basescu remain under pressure.
Seeking to maintain the unity of his cabinet, Boc appointed Cristian Diaconescu, a member of a junior coalition partner party who has previously served in both leftist and centrist governments, as his new foreign minister.
Diaconescu, 52, a former justice and foreign minister, will replace Teodor Baconschi, a former adviser of Basescu and member of Boc’s PDL party, who was sacked on Monday for calling protesters “inept and violent slum-dwellers”.
Diaconescu was sworn in late on Tuesday at the presidential palace in Bucharest, and President Basescu addressed the protests for the first time since they broke out.
“I have seen a justified wave of discontent from people who ... suffered wage cuts, VAT hike and a cut in certain pensions,” Basescu said.
Protests were expected to continue across the country.
Romania had the fastest growth rates in the European Union until the financial crisis of 2008, which plunged its economy into a deep recession and has left it languishing with per capita income less than half the bloc’s average.
The IMF safety belt and austerity measures have maintained investor confidence and rebalanced the economy, but expected growth of 2.5 percent last year is far from enough to close the gap even on post-communist neighbours like Poland and the Czech Republic.
The average wage is less than 400 euros ($520) a month, some villages and even districts of Bucharest have no running water or electricity and horse-drawn carts are widely used in the countryside.
Opinion polls put support for Boc’s PDL at 18 percent while backing for the USL, a fragile leftist alliance that has demanded the election be brought forward, is about 50 percent.
Analysts say the protests, the largest since the austerity measures were passed, are raising the pressure on Boc and Basescu but are unlikely to produce changes in government policy, at least for now.
“The government has made many steps back since protests erupted ... and this type of move could represent more fuel for the protesters in the square,” said Bogdan Teodorescu, an independent political analyst.
“The government looks very fragile right now.”