Romanians Vote For New President Sunday Hoping To Break Political Gridlock

Romania has been in a political gridlock since mid-October, when its democrat liberal government was ousted in a no-confidence vote in Parliament, a first in the 20 years of democracy after the fall of the communist regime.

Incumbent President Traian Basescu, who is seeking reelection with the support of the Democratic Liberal Party, has already twice failed to win Parliament support for a new prime minister and the country will likely not have a legitimate government in place before the election runoff scheduled for December 6.

The Constitution bans Basescu from dissolving the Parliament and call for early elections during the last six months of his term, which leaves it up to the future president to name a prime minister whose government should secure a confidence vote.

Basescu’s main contenders in the election are Social Democratic Party leader Mircea Geoana and Liberal Party leader Crin Antonescu. Whoever is elected as the country’s next president will have to seek compromises because neither party has enough seats in Parliament to support a candidate on its own. Basescu’s democrat liberals have 167 lawmakers, social democrats have 158 and liberals have 79 from a total 471 MPs.

Because it doesn’t have a proper government, the country, which relies on the rescue package overseen by the IMF, will not see further disbursements of the loan until it adopts next year’s state budget.

Romania was scheduled to receive a EUR1.5 billion third tranche from the IMF in December but IMF Romania country chief Tonny Lybek said Thursday the next two tranches are likely to be disbursed in March 2010.

The Fund has already disbursed around EUR6.6 billion to Romania in the first two tranches and the fourth one was set at EUR820 million.

Romania has to keep this year’s budget deficit at 7.3% of GDP under its agreement with the IMF and bring it down to less than 6% of GDP next year. The country’s third quarter economic growth has seen an annual decline of 7.1% and the Finance Ministry sees it at minus 7.5% at the end of the year.

The country has already seen social unrest over an IMF-required law regulating wages across the public sector and is prone to witness more protests if the future government does cut tens of thousands of public jobs and lowers wages, as the IMF requires.