Foreign analysts foresee possible early parliamentary elections

They said that the victory of the candidate supported by the Democratic Liberal Party (PD-L) will prolong the political crisis, because the Social Democratic Party (PSD) and the National Liberal Party (PNL) majority will continue to block the replacement with an exclusively democratic-liberal government of the Boc Cabinet, which fell on 13 October, following a no-confidence vote in Parliament. Many analysts are likewise anticipating early parliamentary elections. All analysts interviewed by Business Standard said that Romania’s top priority is the quick formation of a government, which can push the 2010 draft budget through Parliament, so that the IMF agreement gets back “on track.” “Băsescu re-election involves a risk of more difficulties in the formation of a strong government, as his attempts to replace the Boc Cabinet were rebuffed by the Parliament. The fact that Romania has not yet a budget law for 2010 - while countries like Bulgaria or Hungary have - is not a good sign,” Neil Shearing, economist at Capital Economics, in London, told Business Standard.

“Given the state of the Romanian economy, the IMF agreement is very important to maintain stability. Romania needs fast a budget law for 2010. For the international markets, the election of Traian Băsescu is a good sign as he showed during electoral campaign more support for the IMF agreement,” said Ivan Tchakarov, of the British Nomura brokerage firm.

“The re-election of Mr. Băsescu will prolong the political stalemate in the short-term, and early Parliamentary elections might be needed. In this respect, the sooner, the better. Until then, a compromise will have to be found on the vote of the budget for next year, and I hope that the renewed legitimacy of President Băsescu will help the Parliament endorse measures compliant with the IMF requirements,” indicated Alexandre Vincent, analyst at BNP Paribas in Paris, for Business Standard.