BLBG:Romania Set For Further Political Turmoil After Vote
Romanian President Traian Basescu survived a second attempt to oust him in five years as a voter boycott invalidated an impeachment referendum, setting the stage for further battles with Premier Victor Ponta.
Turnout at yesterday’s referendum called by Ponta’s ruling coalition was 46.13 percent with 97.5 percent of votes counted, below the minimum threshold of half the electorate, according to preliminary figures released by the central electoral bureau today. About 87.5 percent of those who participated voted to oust Basescu.
Ponta’s government, the Balkan nation’s third this year, took power in May riding a Europe-wide backlash against austerity steps. The referendum, which must be endorsed by the Constitutional Court, will probably intensify wrangling that pushed the leu to a record low against the euro, boosted borrowing costs and delayed a review of a bailout loan, according to Commerzbank AG’s Thu Lan Nguyen.
“It will probably become clear very quickly that the political leadership of the country will remain divided so that further conflicts would be unavoidable,” said Nguyen, a currency strategist, in Frankfurt before the vote. The leu may get “a very short-term” boost from the result, she said.
Weaker Leu
The leu has been the world’s second worst-performing currency against the euro in the past month after the Sudanese pound. It has dropped 3.5 percent, touching a record-low 4.6509 per euro on July 24, and traded at 4.5971 at 10 a.m. in Bucharest. The yield on Romania’s 2022 Eurobonds has risen 19 basis points to 6.18 percent over the same period.
Ponta has said repeatedly any collaboration with a reinstated Basescu would be impossible and questioned his authority after the “massive vote” against him.
“We have nothing more to discus with a man rejected by the citizens,” Ponta told reporters today.
The government’s efforts to ease impeachment rules and diminish the Constitutional Court’s powers have drawn criticism from European Union leaders including German Chancellor Angela Merkel, who voiced concern that democracy is backsliding in the former communist country.
‘Coup’ Averted
“Romanians rejected a coup d’etat,” Basescu told reporters yesterday. “The flame of democracy is still burning.”
The plebiscite was called by Ponta’s ruling coalition, which wanted to remove Basescu for overstepping his duties in announcing austerity measures. Basescu, who said “jailable politicians” were trying to orchestrate his ouster, urged citizens to boycott the vote to ensure turnout was below 50 percent of the country’s 18.3 million eligible voters.
Basescu will return to office immediately after he was suspended for a month to allow the vote to take place. Parliamentary elections are expected to take place in the fourth quarter.
“Should President Basescu stay on, the cohabitation with Premier Ponta would no doubt be very difficult, not least due to personal animosity between the two,” Pasquale Diana, an economist at Morgan Stanley in London, said in a July 27 report. “And beyond the near term, Basescu could also help to facilitate a surprise outcome at the next election.”
To contact the reporters on this story: Irina Savu in Bucharest at isavu@bloomberg.net; Andra Timu in Bucharest at atimu@bloomberg.net
To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net
