Romania’s parliament approves new government

Romania’s newly appointed government won the approval of parliament Monday, gaining the official right to run the country.

The Cabinet was installed during a ceremony Monday evening.

Romania is the latest country in the European Union to welcome a left-leaning government amid austerity fever, corruption and widespread public pressure. The change of power is the result of a fiscal tightening by the former center-right Democratic Liberal government, which led a slow recovery from the economic recession in the past three years.

The government was approved with 284 votes, 49 more than the minimum required by the constitution; 92 lawmakers voted against the Cabinet.

“I am honored and proud to have gained your vote today and I hope I will not disappoint you,” said the new prime minister, Victor Ponta, after the results were announced. “I would like to thank my colleagues for voting a Social Democrat prime minister and to assure them I will vote a liberal president, as well.”

The former government collapsed at the end of April after a censure motion filed by the opposition won approval in parliament. The new government, an alliance of Social Democrats and liberals, was also backed by the lawmakers representing minorities and by the National Union for the Progress of Romania (UNPR), a center-left party run by a group of independents that struck a deal with Ponta last week.

With a Romanian currency dropped to an all-time low against the euro shortly after the former government’s fall, the new Cabinet is expected to maintain the country’s economic stability and continue the reforms within the state-owned companies.

One month ahead of local elections, the Cabinet announced its intention to raise salaries in the public sector 15% this year. Fitch Ratings said such populist policies that might result in fiscal slippages could downgrade Romania this year.

However, Finance Minister Florin Georgescu said the Cabinet is able to restore public wages without affecting financial stability because they had been cut by the former government in 2010 as part of a series of austerity measures.

Romanian President Traian Basescu said on Sunday that he supports restoring public wages to pre-austerity levels as long as the measures respect a deal reached with the International Monetary Fund.

After the government’s downfall, the IMF, the European Commission and the World Bank had suspended discussions with Romania until the new government was officially installed.

Ponta met on Monday with IMF representatives to assure them that Romania is stable and can fulfill its obligations. He also said it is in Romania’s interest that the IMF representatives leave the country with a new letter of intent signed by the new Cabinet. The letter, stating Romania’s commitment to stick to the IMF deal, is expected to be debated and approved on Tuesday, in the government’s first meeting.

The IMF representatives recently began an official visit to Romania to review the country’s financial situation. This follows a €5 billion ($6.5 billion) loan granted last year to prevent fiscal instability. Romania aims to cut its budget deficit to 2.25% of GDP this year, from 5.2% in 2011.

The new government’s priorities also include better absorption of EU funds, as Romania has the lowest absorption rate of funds in the European Union. The Cabinet has promised to crack down on corruption and political appointments in the public institutions, and to create new jobs.

Romania’s political turmoil was aggravated recently after a wave of resignations in the ruling coalition, represented by the Democrat Liberal Party, the ethnic Hungarians and the minority groups. Mihai Razvan Ungureanu resigned as prime minister in April after only 78 days in office following the censure motion.

“They betrayed us and voted for the motion,” Democrat Liberal leader Emil Boc said of the minorities.

Shortly after the announcement, Basescu made Ponta his appointee for prime minister.

Ponta, 39, entered politics in 2001 and was elected as a minister twice, in 2004 and in 2008, before becoming leader of the Social Democrat party in 2010.

Romania, the European Union’s second poorest country, had to undertake drastic measures to pay for a loan of more than €20 billion ($26 billion) from the IMF, World Bank and EU in 2009. Among them was a 25% wage cut in the public sector. The cuts proved unbearable for Romanians, and thousands around the country protested in January against the Cabinet and Basescu, and toppled the government let by Boc, Ungureanu’s predecessor.

The new Cabinet is expected to stay in power until November, when Romania will have parliamentary elections that will mark the third change in government this year.