November 27, 2014 / 1:33 PM / 3 years ago

Romania PM loses coalition ally after election defeat

BUCHAREST (Reuters) - Romania’s ruling coalition splintered on Thursday as an ethnic Hungarian party said it would quit the government in the wake of Prime Minister Victor Ponta’s surprise defeat in this month’s presidential election.

Romania's Prime Minister Victor Ponta attends a news conference in Bucharest November 17, 2014. REUTERS/Grigore Popescu

The departure of the UDMR party, which joined the government in early 2014, will weaken Ponta but still leaves his center-left alliance with a 60 percent majority in parliament.

A parliamentary election is due in 2016 and doubts about the stability of Ponta’s government could complicate efforts to spur economic growth and push through reforms mandated in an aid agreement with the International Monetary Fund. IMF officials arrive in Bucharest for talks about the 2015 budget next week.

Thursday’s announcement partially fulfils a prediction by incoming President Klaus Iohannis, who told Reuters lawmakers could start abandoning Ponta’s coalition in the coming weeks and months to bring down the government next year.

“We did the math ... and even without us the government has enough of a majority in parliament. We understood the message from the voters in the presidential elections,” UDMR leader Hunor Kelemen told reporters after a party meeting.

It is unclear whether other coalition partners or individual MPs will be tempted to follow suit, but political squabbles and defections have dogged Romanian politics since the country emerged from Communist one-party rule in 1989.

The Romanian leu eased 0.1 percent against the euro on Thursday, retreating from four-week highs following the UDMR decision.

Iohannis, an ethnic German mayor who is backed by two center-right parties, scored a shock victory over Ponta in the presidential ballot. Ponta ruled out resigning following his defeat and said his coalition was stable.

Iohannis campaigned on a pledge to tackle corruption and make Romania, which joined the European Union in 2007 and is the bloc’s second poorest country, attractive to foreign investors.

Speaking in his capacity as leader of the National Liberal Party, Iohannis said after his victory that his party could forge new alliances in parliament to try to topple Ponta.

Ponta’s position as leader of the leftist Social Democrat (PSD) party and as prime minister could also be challenged from within his own ranks. The party will probably hold a special congress early next year.

“Today’s move by the Hungarians signals that, maybe, a new political majority has the chance to ripen,” political commentator Cristian Patrasconiu said.

“We may still have to wait a bit to see how other coalition partners will behave, and we will also have to wait and see how positions in a congress in the PSD will develop.”

Writing by Matthias Williams; Editing by Toby Chopra and Crispian Balmer

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