October 24, 2019 / 1:11 PM / a month ago

Romanian centrists seek urgent budget approval, keep gap in check

FILE PHOTO: PNL (National Liberal Party) president Ludovic Orban looks on during a press conference held by EPP leaders and Romanian President Klaus Iohannis in Sibiu, Romania, May 9, 2019. Inquam Photos/Octav Ganea via REUTERS/File Photo

BUCHAREST (Reuters) - Romania’s centrist National Liberal Party of Prime Minister-designate Ludovic Orban wants to quickly adopt next year’s budget and rein in a fiscal shortfall below the European Union’s 3% threshold while strengthening courts. Expansionary fiscal and wage policies by the outgoing Social Democrat government have boosted Romania’s deficits, while tax hikes, energy price caps approved without public debate, and moves to weaken the judiciary have dented investors’ appetite.

A draft governing program sent to Reuters said the party wants to review and correct “toxic” tax and judicial measures that have sapped courts and prosecutors’ independence, enforced over the past three years.

It said the Liberal minority government, which aims to win a parliamentary vote of confidence next Wednesday, will be a slimmer one, with only 16 ministries instead of the current 24.

Party sources said the pro-business party’s economic adviser Florin Citu has been proposed as finance minister, before the cabinet line-up is sent to parliament later in the day.

U.S.-educated Citu, who has worked for the European Investment Bank and New Zealand’s central bank, has advocated measures aimed at cutting cut red tape and improving transparency in the public sector - which have deterred foreign investment.

The Social Democrat government of Viorica Dancila collapsed earlier this month after losing a no-confidence vote in parliament.

Lawmakers will likely endorse Orban’s cabinet, but the 56-year-old former transport minister will struggle to negotiate majorities for any legal initiative because of a fragmented opposition, until a late 2020 general election.

Analysts also believe that he could gain enough backing to partially reverse a judicial overhaul that has been described by Brussels and U.S. officials as a threat to the rule of law.

A long election cycle in Romania weighs on financial assets, with the European Union member holding a presidential ballot in November, as well as local and parliamentary elections likely in mid- and late-2020.

Editing by Chizu Nomiyama

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