Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Romanians Go to Polls as Premier Vows to Ease Austerity

Romanians cast votes for parliamentary lawmakers, with Prime Minister Victor Ponta poised to win on pledges to overturn austerity measures passed by a previous government and spur the economy.

Voting stations will close at 9 p.m. Bucharest time, when exit polls will be released. Turnout at 6 p.m. was 36.54 percent. Official results will be published tomorrow beginning at 10 a.m., according to the Central Electoral Commission. Ponta’s Social Liberal Union, or USL, may win an outright majority, according to recent opinion polls.

Ponta, running for the first time as head of government, has worked to diffuse the kind of voter anger that is sweeping Europe over budget cuts and tax increases that sparked mass protests, eroded salaries and wiped out thousands of jobs. Ponta is locked in a dispute with President Traian Basescu, an opposition ally who survived an impeachment effort by Ponta in July, as the nation slips back toward a new recession.

Ponta’s Cabinet “will have a legitimate majority, which cannot be challenged by Basescu or by any other European leader,” said Adrian Moraru, an analyst at the Institute for Public Policies in Bucharest, in a phone interview. “The tensions may continue, but I think Ponta will be reappointed in the end. Otherwise, Basescu will face suspension again and this time he will probably be ousted.”

European Anger

Ponta is using popular opposition to austerity to intensify his political war with Basescu, said analysts including Daniel Lenz at DZ Bank AG. Voter acrimony over austerity during the three-year-old sovereign-debt crisis has resulted in the ouster of leaders in countries including Ireland, Portugal, Greece, Italy, the Netherlands, Spain, Slovenia, Slovakia and Finland.

Borrowing costs have risen and the leu fell to a record 4.6520 against the euro on Aug. 3. The leu has declined 0.4 percent so far this week, making the currency one of the worst-performers in the region. Credit-default swaps, which measure the cost of insuring Romanian debt against non-payment for five years, traded at 222 points today, after hitting 206 points on Oct. 17, which was the lowest in at least two years.

Ponta’s USL, in power since May and the third Cabinet this year, had 57 percent in the last poll before elections, compared with about 19 percent for the opposition alliance, according to a Dec. 3 to Dec. 5 survey of 1,234 people by Bucharest-based Public Affairs.

Easing Austerity

The opposition alliance is aligned with President Traian Basescu, who has the right to choose the next premier. The survey had a margin of error of 2.8 percentage points. Earlier polls showed similar outcomes.

“I voted against Basescu and his crew because the quality of our life significantly deteriorated when they were in power,” said Alexandrina Majernik, a 60-year-old retired women said after casting her vote in Bucharest. “The medical system has crashed and if we have a problem we have to pay for everything, including basic services that used to be free.”

Ponta’s coalition pledged to undo a valued-added tax increase of 5 percentage points and cut an income tax for low earners in four years. The opposition Right Romania Alliance says it will cut income taxes beginning next year and lower some social-security contributions.

The Democrat-Liberal Party, now part of the opposition alliance, lowered state wages by 25 percent and raised the sales tax in 2010 to narrow a budget deficit and meet pledges to the International Monetary Fund and the European Union. Former Prime Minister Emil Boc, an ally of Basescu, stepped down on Feb. 6 to ease political and social pressure stemming from nationwide anti-austerity street protests.

Power Struggle

Romania was earlier this year engulfed in a power struggle between Ponta and Basescu that culminated in a 52-day suspension for the president, followed by an invalidated nationwide impeachment vote on July 29. Basescu returned to office at the end of August.

“While the expected comfortable victory of USL means elevated chances to form a new government, the smoothness of the process to voting the new Cabinet depends on the candidate to the premiership designated by the president,” Raiffeisen Bank economists, including Ionut Dumitru and Ana-Maria Morarescu, said in a note. “The tensioned relation between President Basescu and the USL alliance does not bode well for a smooth process.”

Premier Negotiations

Under the constitution, the party that wins more than 50 percent of parliamentary seats is entitled to negotiate the nomination of prime minister with the president. If no party has a majority, the president chooses a premier after consulting with all the parties.

“I’m skeptical that a union between the right and the left will work, especially under the current economic situation,” said Constantin Jelescu, a 47-year-old engineer, after casting his vote in a Bucharest neighborhood. “We need strong state institutions and it’s good to have someone defending them. They don’t have to all be subordinated to the Parliament, especially the judiciary.”

Failed Impeachment

After the failed impeachment attempt, Basescu said he won’t designate Ponta as prime minister again. He has since declined to repeat that statement in public. Ponta said he is the only candidate for prime minister should his political alliance win.

“The results of the elections aren’t difficult to anticipate in my opinion, but their consequences are,” said Alexandru Cumpanasu, a Bucharest-based political analyst at the Association for Implementing Democracy, in a phone interview. “I’m not convinced that Basescu will nominate Ponta again. He may try to buy some time to break the USL apart.”

The premier-designate has 10 days to draw up a governing program and pick his ministers before seeking a confidence vote in Parliament.

Ponta and Basescu agree that Romania needs to reach a deal with the IMF and the EU next year, once the current 5 billion-euro ($6.5 billion) precautionary accord, signed in 2011, ends. The nation has drawn no money from the facility. Romania also got a 20 billion-euro bailout from the IMF and the EU in 2009.

Falling Investment

Skepticism about the government’s ability to deliver on promises has exacerbated concern about a faltering economy. Gross domestic product contracted a seasonally adjusted 0.5 percent in the third quarter, wiping off a 0.1 percent gain in the previous three months, according to revised data from the statistics office. Foreign direct investment plunged to 1.1 billion euros in the first nine months from a record 9.5 billion euros in 2008.

The country of about 19 million, the second-largest in the EU’s east after Poland, has slipped to 72nd of 183 nations in the World Bank’s 2012 Ease of Doing Business survey, below neighboring Bulgaria and Hungary.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.