Romanian voters will probably
impeach suspended President Traian Basescu in a referendum today
if turnout, the key condition to validate the vote, reaches a
minimum threshold of half of the electorate.
About 37.7 percent of the 18.3 million eligible voters cast
ballots by 8 p.m. in Bucharest, according to estimates from the
central electoral bureau. Polling stations are open until 11
p.m. About 72 percent of voters want to oust the 60-year-old
Basescu, while 28 percent will back him, figures from polling
company Operations Research showed.
Premier Victor Ponta’s government, the Balkan nation’s
third this year, took power in May riding a Europe-wide backlash
against austerity steps. His efforts to ease impeachment rules
and diminish the Constitutional Court’s powers have drawn
criticism from European Union leaders including German
Chancellor Angela Merkel, who voiced concern that democracy is
backsliding in the former communist country. The tumult has
pushed the leu to record lows and boosted borrowing costs.
An invalid vote “would be the worst outcome and trigger a
selloff in the currency in the coming weeks as we may see the
government undertake more constitutional gymnastics in order to
remove the president,” Peter Attard Montalto, an economist at
Nomura International Plc in London, said by e-mail. Impeachment
would “remove uncertainty” for investors in the medium term.
Leu Weakens
The leu has been the world’s second worst-performing
currency against the euro in the past month after the Sudanese
pound. The leu has dropped 3.5 percent, touching a record-low
4.6509 per euro on July 24, and traded at 4.6075 late on July
27. The yield on Romania’s 2022 Eurobonds has risen 19 basis
points to 6.18 percent over the same period.
The plebiscite was called by Ponta’s ruling coalition,
which wants to remove Basescu for overstepping his duties in
announcing austerity measures. Basescu, who said “jailable
politicians” are trying to orchestrate his ouster, has urged
citizens to boycott the vote to invalidate it because of
insufficient turnout. The president, who took office in 2004,
survived a similar vote in 2007.
Two prior polls showed about 69 percent and 66 percent of
the electorate would vote to dismiss Basescu, who announced
state wage cuts and tax increases in 2010.
‘Individual Solutions’
“Europe needs individual solutions to tackle individual
problems as the union can’t be turned into a success story
against the interest of European nations,” Hungarian Prime
Minister Viktor Orban said in Baile Tusnad, Romania yesterday
according to the Hungarian state news service MTI. Orban urged
ethnic Hungarians living in Romania to “take good decisions,
meaning to take no decision at all” during today’s vote,
according to Mediafax.
Ponta, who is entangled in a plagiarism scandal similar to
one that prompted Hungarian President Pal Schmitt to resign in
April, said after voting today that he is outraged by Orban, who
encouraged the ethnic Hungarians not to vote.
Should Basescu lose, the government must organize early
presidential elections within three months. If the final turnout
is below the required minimum, Basescu will return to office,
according to constitutional rules. Ponta has said repeatedly any
collaboration with a reinstated Basescu would be impossible.
“If Basescu is reinstated, we’ll see more attacks and
criticism from both sides,” said Alexandru Cumpanasu, a
Bucharest-based political analyst at the Association for
Implementing Democracy, who gives the suspended president a
“50-50” chance of returning to office. “If he is dismissed,
we’ll see political campaigning before the elections in November
because the government’s majority in Parliament is tenuous.”
The political wrangling that led to the referendum has
delayed until July 31 the start of a planned quarterly review by
the International Monetary Fund, the EU and the World Bank of
Romania’s 5 billion-euro ($6.2 billion) precautionary loan. They
will also discuss the Cabinet’s 2013 budget plans amid the
European sovereign-debt crisis.
“The more important issue than the referendum and
Constitutional Court setup is what happens with fiscal policy in
the 2013 budget as we approach the election at the end of the
year,” Nomura’s Montalto said. “This should be the key concern
for investors.”
To contact the reporters on this story:
Irina Savu in Bucharest at
isavu@bloomberg.net;
Andra Timu in Bucharest at
atimu@bloomberg.net
To contact the editor responsible for this story:
James M. Gomez at
jagomez@bloomberg.net
