Romania gained a respite from a months-long political crisis that has delayed international rescue loans when President Traian Basescu nominated centrist ally Emil Boc Wednesday to stay on as prime minister. The move will likely provide a short-term solution to get a vital 20 billion euros IMF-led deal back on track as early as February but could foster longer-term political instability. After months of wrangling, Romania's feuding parties look no closer to setting aside their differences to tackle cost-cutting reforms required to lift the economy out of recession and boost growth, analysts say. The next government faces one of the biggest challenges in the country's post-Communist history as Boc will be tasked with hastening recovery from a deep recession and speed up preparations for euro membership. l According to constitution, Boc has 10 days to form a coalition government around his Democrat-Liberals and ask parliament for a vote of confidence. He is expected to team up with an ethnic Hungarian Party and other ethnic minorities. Analysts say additional backing from a 25-strong group of independent deputies will give him up to five votes more than the 236 majority needed in both houses for a vote of confidence. l Boc has so far secured formal backing from these groupings but not yet a written agreement. Analysts see this as a formality and say a cabinet line-up may be ready as early as Saturday and clear parliament by Dec. 23. l Analysts say Boc is likely to shrink the government from the current 20 ministerial posts and offer the Hungarians up to 3 portfolios with another 2 for independents. He is expected to keep key ministers including finance and economy. l Boc's slim parliamentary majority would allow him to pass a cost-cutting 2010 budget that the IMF has demanded to resume loans stalled due to political crisis. l The bill, key to unlock the combined disbursement of 3.3 billion euros worth of IMF and European Union aid in February, should easily pass parliament by mid-January. l However, Boc will have only shaky support for more serious reforms such as slimming down a bloated public sector and the country's political schism between more and less reform-minded camps would continue. l Analysts say Boc may struggle to get longer-term economic and judicial reforms through parliament if his wafer-thin majority is marred by absenteeism — a frequent problem in the Bucharest legislature. l The Social Democrats have said they would oppose mass public sector job cuts and plans to streamline a bloated pension system. The Liberals have said they may want to revisit an IMF-mandated wage bill designed to put order into state finances.
