Romanian president re-elected

2009-12-07 15:26

Bucharest - Romanian President Traian Basescu, an outspoken anti-graft campaigner, won re-election by a whisker, defeating a leftist challenger for the job of leading the EU newcomer out of political and economic crisis.

Basescu scored 50.37% versus 49.63% for Social Democrat leader Mircea Geoana in Sunday's runoff ballot, final results from the Central Election Bureau showed on Monday.

Geoana, who claimed victory as soon as the polls closed, did not immediately concede defeat. But Geoana's designated candidate for prime minister, Klaus Johannis, appeared to accept the outcome, telling a news conference: "My road ends here."

The vote was one of the most important for the Balkan state since it executed Stalinist dictator Nicolae Ceausescu 20 years ago, as the victor must name a new government that can restart talks on a stalled €20bn IMF rescue loan.

Knife-edge outcome

The knife-edge outcome sent the leu currency slightly lower against the euro, and analysts said it could extend a political deadlock that put the aid package on ice last month.

The analysts said the abrasive Basescu may struggle to form a government with other major parties with which he repeatedly clashed over anti-corruption measures during his five-year term.

"It will be much harder for Basescu to form a government," said Adrian Basaraba, head of the political science department at the University of Timisoara.

Exit polls on Sunday had shown Geoana in the lead, prompting Social Democrat former president Ion Iliescu to brand the official figures as "suspect". Basescu appeared to have won most of some 150 000 ballots cast by the more than two million Romanians living abroad, who backed him heavily in a November 22 first round.

IMF deal

Last month, the International Monetary Fund suspended review of the aid deal propping up the EU's second poorest economy, after opposition parties toppled a Basescu-allied cabinet that has stayed in place as an interim administration.

The Fund has said it will hold back a €1.5bn aid tranche - originally planned for December - until a new government and a cost-cutting budget are in place, raising concern among markets about Bucharest's finances.

The result marked a surprise comeback for Basescu, who had trailed Geoana by eight percentage points in the last two polls before the vote, after the leftist forged a pact with the third largest party, the Liberals, to rule together if he won.

Mustering support for a cabinet could be a stretch for Basescu, who already saw two torpedoed by Geoana's ex-communist Social Democrats and other opposition parties after the leftists walked out of a unity coalition in September.

IMF endorsed

The 58-year-old former Bucharest mayor has endorsed IMF recommendations to freeze state wages, reduce some pensions, and cut as many as 150 000 jobs in the sprawling public sector, which analysts say hinders Romania's long term growth prospects.

The economy is expected to contract by 8% this year.

Markets were concerned the ex-communist Social Democrats would water down economic reforms and halt steps to fight sleaze if Geoana won. The country of 22 million is ranked the most corrupt in the EU, according to Transparency International.

Analysts said Basescu would seek a government backed by his centre-right Democrat Liberal allies, an ethnic Hungarian party and potential defectors from the Liberals, his preferred partner.

"It would not be so hard to find 20 extra votes from the Liberals and the Social Democrats because MPs fear early elections," said political analyst Mircea Marian. "But a minority government means big risks, including risks for the IMF deal."