BUCHAREST, Oct 13 (Reuters) - Romania's parliament toppled
the minority centrist government in a vote of no-confidence on
Tuesday ahead of a Nov. 22 presidential poll and putting the
country's IMF-led aid package at risk.
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Economists said the vote could complicate reforms and
potentially delay the continued disbursement of Romania's 20
billion euro international bailout package, which in turn could
hurt stability and cause the leu currency to weaken.
The bluechip index BETI <> was down 1.16 percent on the
day. The Romanian leu <EURRON=> eased off 7-month lows against
the euro touched earlier in the session after investors booked
profits after the vote, dealers said.
Following are comments from politicians and analysts:
COMMENTS:
NICOLAIE ALEXANDRU-CHIDESCIUC, ING BANK, BUCHAREST
"What the market would probably like to hear is that we will
have a new government as soon as possible and that there is some
predictability in the future."
"As far as the IMF deal is concerned, we will probably
receive the third tranche because it depends on thrid quarter
deficit figures, which were met."
"Also, I think politicians will manage to find enough
support to get the pension bill through parliament However, the
big problem will come in the first quarter of next year when the
IMF reviews performance for the whole of 2009."
"Given the way things are now, nobody will care about budget
execution, so the 2009 budget deficit is headed towards 8.5-9
percent of GDP and that is where are problems with the IMF may
come from."
"The optimistic scenario: we might see delayed tranches."
ELISABETH GRUIE, CURRENCY STRATEGIST, BNP PARIBAS
"The weakness of the government is a matter of concern for
Romania's commitment to the IMF programme and raises questions
over its ability to implement the tough budget tightening
measures needed going into the elections. This will keep
Romanian assets on the defensive going into the elections."
MIRCEA GEOANA, CHARIMAN, SOCIAL DEMOCRAT PARTY
"I want to make an appeal to responsibility, as the moment
we are going through is difficult. We all have the duty to
contribute to naming a new government as soon as possible."
"I appeal to replace the actual government with a government
of professionals, independent, able to ensure a guarantee for
fair elections and capable to assure the management of economic
and social problems in a balanced way."
EMIL BOC, OUTGOING PRIME MINISTER
"We will stay in power until ... we have a new government
endorsed in parliament."
"Today the PSD-PNL majority adopted this no confidence
motion to be sure (parliament members) ... will not lose their
privileges."
"It is an honour for the government to fall trying to pass
the pension law. It was (a choice) between doing reforms or not.
We tried ... but we were stopped."
"However, I'm convinced the path of reforms will not be
stopped."
MIRCEA GEOANA, HEAD OF SOCIAL DEMOCRAT PARTY
"We are willing to support a government made of independents
that is able to reinstate trust in the economic policies of the
Romanian government, domestically and abroad."
ELISABETH ANDREEW, CHIEF ANALYST, NORDEA MARKETS, STRATEGY,
& CORPORATE RISK ADVISORY
"Since new parliamentary elections cannot be held within the
last six months of the presidential term, an interim government
is now likely to take over. Presidential elections will be held
on 22 November."
"The political uncertainty is clearly negative for the leu,
as the interim cabinet will rule with limited power and may fail
to adopt important legislation to fulfil requirements by the
IMF.
"Confusion and uncertainty may remain until at least
year-end. EUR/RON today hit the highest level since the end of
March and we see a risk that it will continue higher."
CRIN ANTONESCU, CHARIMAN, LIBERAL PARTY (PNL):
"It is the first no confidence motion that has torn down a
government in the last 20 years in Romania. It is a victory of
democratic principles."
"Like I've said ... now, and not in two months, we must try
to give Romania a government that will handle the real problems
of this country. Now and not in two months we must try as a
parliament ... to put the government to work for Romanians."
"Romanians have big problems, hard problems, that the prime
minister did not mention today."
"We will propose in the next few hours a solution ... for a
(new) prime minister."
CURRENCY DEALER, BUCHAREST
"The leu is firming a bit. The possibility that the
government would fall was high."
"The leu depreciated on expectations that the government
would fall. Now investors are taking profit. Buy the rumour,
sell the fact."
SECOND CURRENCY DEALER, BUCHAREST
"Investors are booking profits. Large changes are expected
after the presidential election anyway, so the cabinet's fall is
not that negative."
"At any rate, I am convinced that the central bank is
constantly monitoring the market and if the leu weakens past a
certain level it will intervene. Some say the level is 4.3 (per
euro), others 4.35, but it is hard to say."
NEIL SHEARING, EMERGING EUROPE ECONOMIST, CAPITAL ECONOMICS
"Most important is what this means for the future of the IMF
programme, in the context of Romania's previous failed IMF
programmes.
"In particular, are there going to be any signs over the
next couple of weeks that we can get a strong government out of
this?"
"Certain... reforms, sticking to the terms outlined in the
programme -- that is really what the market is going to be
focussing on."
"If we can't, then it means further fiscal slippage, a
selloff in the leu, little scope for further rate cuts --
possibly even rate hikes... It is probably too soon to tell."
ROZALIA PAL, UNICREDIT TIRIAC, BUCHAREST
"For the IMF deal, I think the budget deficit target will be
harder to meet. This is a risk that started with the collapse of
the coalition at the start of October."
"As far as the (IMF) deal goes, we don't believe tranches
will stop, but rather we hope they will be postponed if
conditions are not met in the short term."
"This is a risk we have taken into account."
RAFFAELLA TENCONI, CHIEF ECONOMIST, WOOD & CO.
"The collapse of the PDL-led government is bad news, though
not surprising given the developments of the last ten days."
"We doubt another government will be able to receive
parliamentary support in the near term, so early elections are
highly likely at the beginning of December."
"We expect the release of the next IMF loan tranche to be
delayed by a few months, until the new government is in place
and can clarify its position with the IMF."
"Although the PSD could prove a hurdle for the reforms, the
economy simply has no other option but to follow the IMF
programme. The recent balance of payments data show external
vulnerability remains elevated, despite some improvement since
the turn of the year."
LARS CHRISTENSEN, EMERGING EUROPE ECONOMIST, DANSKE BANK
"Obviously bad news for the Romanian markets -- look for
further weakness in the Romanian leu.
"It still too early to say what this will mean for the
Romanian IMF deal, but it is clearly not good news. That said,
this is not yet a Latvian style crisis and there is no imminent
risk to Romania's Standby Agreement."
(Reporting by Reuters bureaux; Editing by Michael Winfrey)
