Romania PM Boc quits after protests

By Ioana Patran and Sam Cage

BUCHAREST (Reuters) – Romanian Prime Minister Emil Boc resigned on Monday, giving way to mass protests against IMF-backed austerity measures and joining leaders of other European Union states felled by soaring debts.

President Traian Basescu named Boc’s justice minister, Catalin Predoiu, to replace him at the head of a government whose popularity is languishing in opinion polls ahead of a parliamentary election to be held by November at the latest.

It was not immediately clear, however, whether Predoiu would form a new government or simply hold the reins until Basescu has had more time to consider his options.

The International Monetary Fund (IMF), which bailed out Romania with a 20 billion euro (16 billion pounds) loan on condition of deep cuts in government spending, said it did not expect the deal to be affected by Boc’s departure:

“I see no reason necessarily for this to have a material effect on the aid agreement. We have every expectation the agreement will continue,” the IMF mission chief in Bucharest, Jeffrey Franks, told Reuters.

Committed at some stage to adopting the euro single currency under the terms of its accession to the EU in 2007, Romania is the 27-nation bloc’s second poorest member and is still struggling with the economic legacy of Communist state control.

While not suffering the difficulties that use of the euro created for leaders in the likes of neighbouring Greece, Romania’s government also struggled to finance itself without IMF support and found itself force to make swingeing cuts that enraged public opinion and brought weeks of street protests.

“I took this decision to release the tension in the country’s political and social situation, but also in order not to lose what Romanians have won,” Boc said in a televised speech, his voice calm.

After he cut public sector wages by a quarter and raised sales tax, his ratings in opinion polls were below 20 percent and thousands of Romanians braved freezing temperatures and heavy snow in the last month to protest.

The leu was largely unmoved by the decision and the cost of insuring Romanian debt was a touch higher.

“It’s crucial that the new government maintain the reforms passed together with the IMF and the European Commission – if the next government stands by these reforms, Romania will be fine,” said Raiffeisen economist Ionut Dumitru.

SLIM MAJORITY

The PDL is at less than 20 percent in opinion polls and he governed in a coalition with the ethnic Hungarian UDMR and a grouping of independents, which commanded a slim but functioning majority.

Victor Ponta, leader of the leftist USL opposition alliance which has more than 50 percent support in opinion polls, told Reuters last week he wanted an early election and was committed to working with the IMF.

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