Romania parliament backs minority government

Bucharest, Apr 4: Romanian Prime Minister Calin Tariceanu today won parliament's backing for a minority government he formed after ending a coalition with his former partners.

As widely expected deputies endorsed the new cabinet by 303 to 27 in a confidence vote. The government will need to rely on the backing of the opposition Social Democrats to stay in power and pass laws prescribed by the European Union.

Tariceanu expelled his Democrat coalition allies from the cabinet on Sunday, saying the move was necessary to end months of political stalemate that has brought reforms to a halt after Romania's EU entry in January.

"We removed the conflict from governing and time will be used to handle the European agenda," Tariceanu told parliament.

"Fighting corruption remains at the top of our agenda." The swearing-in of the new cabinet team could take place as early as Wednesday.

Analysts say the new government made of Tariceanu's Liberals and a junior partner, the ethnic Hungarian party, may muddle through with support from Social Democrats until the end of its term in late 2008.

But they were sceptical whether serious reforms were possible under such a formula, saying the departure of respected Justice Minister Monica Macovei and Tariceanu's reliance on his ex-foes to stay in power boded ill for anti-graft reforms.

"Dependence on the ex-communist Social Democrats will not only make this government more unstable," JPMorgan said in a research note. "It is also likely to make the passing of EU-related legislation more difficult."

No Radical Changes

The Social Democrats have been dogged by sleaze scandals and have been leading opponents of Macovei's drive to cleanse Romanian politics of corrupt officials.

A criminal investigation has also been launched against the head of the small opposition Conservative Party on suspicion of money laundering, prosecutors said today.

Macovei, seen by western observers as the architect of justice reforms that helped win Romania entry to the EU, was replaced by Tudor Chiuariu, a lawyer who headed the anti-fraud office and pledged to make the courts system more efficient.

Analysts said the shake-up was unlikely to usher in any radical change in economic policy and the leu currency quickly recouped early yesterday losses and traded near two-week highs today, tracking other emerging markets.

"While we do not expect any major shift in policy direction, including keeping 2014 as the country's euro adoption target, markets will surely be paying attention to the new government's first statements and actions," JPMorgan said.

Reuters