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Romania election too close to call

  A leftist party and a centrist group were running neck-and-neck on Monday after most votes had been counted from a parliamentary election in Romania, making lengthy coalition talks and an impotent government likely.

 

The leftist Social Democrats, heirs to the communist leaders overthrown in 1989, and the centrist Democrat-Liberal Party had both won about 33% of votes cast on Sunday for the lower house, results from 93% of polling stations showed. “The important thing is that we will have a relatively fragile coalition no matter what happens,” said Lars Christensen, an analyst with Danske Bank.

The ruling Liberal Party trailed on 18% after the unusually close election, which underscored divisions in the poor European Union member state of 22 million people. The Social Democrats tapped into fears about the impact of the global financial crisis and wealth disparities, and promised welfare handouts and tax cuts for the poorest. A growing middle class also wants to see the implementation of anti-corruption efforts promised by President Traian Basescu, who has close links to the Democrat-Liberal Party.

The two opposition parties also shared the lead in the Senate race, where both received about 34% of votes cast. They are now set to spar over who will head the next government. The centrists have an upper hand because of their links with Basescu, who nominates the prime minister. Coalition talks may also depend on outgoing Prime Minister Calin Tariceanu’s Liberal Party (PNL), which is likely to play the role of kingmaker if it forges an alliance with one of the bigger parties. “The PNL is in an excellent position now,” said Mircea Marian, commentator for Evenimentul Zilei newspaper. “It can negotiate with anybody. It can even get the prime minister post.”

FEARS OVER THE ECONOMY

Prolonged wrangling over the next government could delay important decisions on the 2009 government budget, which economists say needs to calm market jitters about the Romanian economy with decisive belt-tightening measures. It also leaves questions open whether the new government will be strong enough to make unpopular spending decisions or whether coalition-making compromises will make the next government’s stance on economic policy weak. Exit polls had shown a convincing, 5-percentage point lead for the Social Democrats.

Romania joined the European Union last year, riding a wave of economic and judiciary reforms put in place by a coalition uniting Tariceanu and Basescu after years of slow progress under the Socialists. Differences widened after EU accession, and Romania made little headway on anti-corruption reforms demanded by the EU. Welfare spending also increased and economists said the economic gains of the previous two decades cold unravel.

Some political analysts say justice reforms, needed to clamp down on widespread corruption, could be further weakened if the Social Democrats gain power. They have blocked the prosecution of several senior politicians. “The PSD has blocked and it will block reforms, and it will only make small steps with a gun pointed to its head,” said Cristian Patrasconiu, a commentator for Cotidianul newspaper.

Economists say Romania is now more vulnerable than many of its neighbors and may need foreign support, such as the funding help sought by Hungary from the International Monetary Fund. Two rating agencies have downgraded Romania’s debt to sub-investment grade in recent weeks, making Romania the only EU member state with “junk” status. The Social Democrats are widely considered the party least likely to rein in spending convincingly. (Reuters)