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CENZURA LA RADIO.RO/censored by Radio Romania
1 octobre 2009

REUTERS/POLICIES IN QUESTION

The coalition collapse in Bucharest also highlighted the risks to economic recovery in crisis-hit eastern Europe stemming from messy domestic politics. Romania particularly needs a deep overhaul of its public sector to free up cash for modernisation and make budget-making more flexible at a time when foreign investment is likely to remain limited for a while. "The region has yet again come into the limelight, and the main reason behind this is again politics," said Simon Quijano-Evans from Cheuvreux. Finance Minister Gheorghe Pogea said Romania was on track to meet the IMF's third-quarter target for a budget deficit equal to 5.4 percent of gross domestic product (GDP). But the leu currency lost more than one percent against the euro on the news, falling as low as 4.2776 per euro even though dealers suspected the central bank had intervened to stabilise the currency. The central bank declined to comment. "The worst that could happen is that the next tranche (of aid) will be delayed for a few months. I don't think the next government will walk out of the programme," said Raffaella Tenconi of Wood & Co in Prague. Moody's Investor Service said Romania's credit rating would be threatened if there were delays in fiscal reforms as result of political turmoil. The main opposition, the centrist Liberal Party, threatened to seek a no-confidence vote in parliament against Boc's cabinet, saying it preferred a new lineup of technocrats. Boc's PD-L and their leftist partners had ruled since December, sparring over cost-cutting reforms and trading blame for economic woes. "The crisis is theirs now," Nica told reporters.

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