Victor Ponta names new cabinet in Romania

Victor Ponta
Victor Ponta
Victor Ponta Premierul desemnat, Victor Ponta

Romania's designate prime minister Victor Ponta named his cabinet on Tuesday (May 1), unveiling a team of politicians from his leftist Social Liberal Union (USL) with a central banker as finance minister and is expected to win parliament backing on May 7.

The USL, made of Social Democrat, Liberal and Conservative groupings toppled the country's two-month-old centrist government in a vote of confidence on Friday, seizing on mounting discontent over austerity policies.

"This is a special government designed for special times. It has a limited mandate of six months until the parliament elections (due in November)," Ponta told a news conference.

"Our political and economic vision will ensure predictability and boost creation of jobs in Romania," he added.

Ponta said he nominated central bank's first Deputy Governor Florin Georgescu, 58, a former finance minister in a leftist government in 1992-1996 and a Social Democrat deputy as finance minister.

Georgescu, a member of the central bank's rate-setting board, will be suspended from his post until the general elections due sometime in November, Ponta said.

Analysts and officials have said parliament is expected to back the 39-year-old head of left-leaning Social Liberal Union (USL) nominated by the president on Friday.
Ponta said his USL now controls 229 seats in the 460 seat parliament but support from a group of 17 ethnic minorities and already announced backing from a 27-member junior parliament grouping UNPR will help it amass comfortable majority.

If parliament rejects him, President Traian Basescu would have to propose a replacement and an extended policy stalemate could trigger a sell-off.

Like other governments in the European Union, ousted prime minister Mihai Razvan Ungureanu's cabinet has faced a wave of public anger against austerity it committed under an IMF-lead aid deal key to maintain investor confidence.

Fitch said it already factored a degree of political uncertainty in the run up to the autumn parliamentary elections into Romania's BBB-rating.

"A material increase in populist policies resulting in a significant divergence from the current fiscal consolidation programme, either before or after the general elections, could put downward pressure on the rating," it said.
The incoming government looks certain to stick to a 2012 budget target agreed with the International Monetary Fund, a Fund official said on Monday, playing down risks from public pressure to ease up on austerity.
Outgoing finance minister Bogdan Dragoi said on Tuesday, Romania can now safely afford to restore public wages to the 2010 level - which would imply a 16 percent rise.

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