September 29, 2015 / 10:00 AM / in 2 years

On trial for corruption, Romanian PM survives no-confidence vote

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

BUCHAREST (Reuters) - Romanian Prime Minister Victor Ponta comfortably survived a no-confidence vote in parliament on Tuesday, his first major test since becoming the country’s only sitting premier to stand trial for corruption.

All three parties in Ponta’s coalition abstained, leaving the main opposition Liberals, who had hoped to lure defectors from the ruling camp, well short of the 275 seats needed to topple the prime minister. Two hundred and seven parliamentarians voted for the motion, with eight opposing it.

Ponta has repeatedly defied calls to resign and vowed to serve out his term, which expires at the end of 2016. The failure of Tuesday’s motion means Ponta is now free to push his program of tax cuts and public sector wage increases.

His left-leaning government will also ask for a new precautionary financial aid deal - which had reassured investors ever since Romania was rescued from a crisis in 2009 - from the International Monetary Fund.

The no-confidence vote took place just days after the most recent aid deal expired last weekend and it is unclear whether the lenders will grant Romania a new credit line.

Ponta has denied charges of money-laundering, forgery and aiding tax evasion in a case that mainly relates to his time as a lawyer, and has accused prosecutors of fabricating the case.

Thousands of opposition-led protesters gathered outside the Communist-era Palace of the Parliament in central Bucharest, calling on Ponta to step down as the debate got under way.

“Today’s vote represents a failure on all fronts by the Liberals and proof they don’t have a number of votes for a government,” Ponta told reporters after the vote.

“I will extract myself from all these political battles and I will be ready to use all my energy as prime minister together with the coalition partners.”

The Romanian leu trimmed its losses after the result of the vote, trading at 0.1 percent down against the euro at 1110 GMT.

“OLD COAT”

Romania is seen as one of Europe’s most corrupt countries, where tax evasion is common and bribes are asked for in exchange for everything from business contracts to state hospital care.

But a crackdown on graft by prosecutors has resulted in some of the most senior politicians, officials and businessmen in the eastern European country investigated and jailed. Ponta’s former finance minister was arrested earlier this year, as was the head of a mid-sized political party, among many others.

“We are tired of so much thieving,” said Petrica Dodis, a 35-year-old clerk from Constanta county who was protesting outside parliament. “We are young, we want something better, instead all we hear about are thefts of millions of euros.”

Ponta’s critics say his refusal to resign has tarnished Romania’s image abroad.

“Ponta must leave. Romania is losing a lot as long as Ponta remains in his post, he lost all of his credibility,” the opposition Liberal party leader Alina Gorghiu told parliament.

“Dear ruling coalition MPs: you hold on to Ponta like an old coat: you don’t wear it anymore but you don’t dare to throw it away yet.”

Ponta, 43, has weathered several political storms since coming to power in 2012, including allegations that he plagiarized an academic thesis and the conviction of the leader of his party in a vote-rigging scandal.

While he looks safe for now, his position could again be challenged when parliament debates the 2016 budget in December.

His government has approved double digit wage hikes for doctors, raising the minimum wage, doubling some subsidies and cutting value added tax on food to 9 percent from 24 percent.

The IMF and the European Commission might be reluctant to grant Romania another aid deal if the government’s finances are seen as shaky or if it moves too slowly on structural reforms.

Speaking on the sidelines of the vote in parliament, Finance Minister Eugen Teodorovici played down fears of a fiscal blowout and said the budget deficit for 2016 would not cross 3 percent even when planned public sector wage hikes are factored in.

Writing by Matthias Williams; Editing by Alison Williams

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