Romanian parliament approves new coalition

ROMANIA'S PARLIAMENT has approved a new prime minister and coalition government, in which former enemies from right and left have joined forces to combat mounting economic problems.

The alliance will be led by prime minister Emil Boc (42), head of the Liberal Democrats (PDL), who won last month's general election.

His cabinet will comprise his party allies and members of the Social Democrats (PSD), the group formed by ex-communists which came a close second in the poll.

After several years of solid growth, Romania's economy is feeling the effects of the global slowdown, and several major enterprises have announced closures and redundancies.

Mr Boc and his cabinet have pledged to cut costs by streamlining state bureaucracy, freezing the appointment of new public sector workers, and "rationalising" the welfare system, but doubts have been raised about their ability to meet EU demands to crush corruption.

"I am here to ask for your confidence vote not only to form a government, but to give stability to the country at an extremely difficult time . . . The effects of the crisis are already being felt strongly in Romania.

"We see wages, allowances and other benefits not being paid. Unemployment grows each day, financing is almost cut off and the lack of orders for local industry is becoming chronic," Mr Boc told parliament.

"We are in a period when the left and right are compelled to bring stability to our economic and political life . . . Now there should not be right-wing people against left-wing people - there should be a single people, the Romanian people, capable of overcoming this difficult situation."

Mr Boc said he would cut public spending on goods and services by 20 per cent, ban public procurement for a year and keep value-added tax unchanged at 19 per cent and the flat rate of income tax at 16 per cent.

Outgoing prime minister Calin Tariceanu urged the new government to back the €10-billion stimulus package that he proposed before the election.

Calling Mr Boc's plans a "train ticket to economic disaster", he said his successor had offered no "real solutions to stimulate growth".

Analysts also fear that politicians will use economic problems as an excuse to relax Romania's already faltering campaign against graft.

"My main worry is that the fight against corruption is sacrificed for the sake of the anti-crisis drive," said Alina Mungiu-Pippidi of the Romanian Academic Society think tank.

Deputies voted in support of the coalition led by Mr Boc by 324 votes to 115.