22 November, 2009 17:20 PM

Presidential election pivotal for Romanian economy


Combination photo of the main three candidates for Romania's presidency, Romania's incumbent President Traian Basescu (C), Mircea Geoana (L), head of Romania's Social Democrat party, and Crin Antonescu (R), leader of Romania's Liberal party, speaking during the final electoral debate in Bucharest on November 20, 2009. REUTERS/Bogdan CristelBy Radu Marinas

BUCHAREST, Nov 22 (Reuters) - Romanians vote on Sunday in a closely-fought presidential election that is key to reviving economic and justice reforms and solving a government crisis that has delayed aid from the International Monetary Fund.

Without the quick formation of a new government and a renewed push to modernise, Romania could fail to recover swiftly from recession and will likely lag behind other former Soviet bloc states that have joined the European Union.

The new president will play a pivotal role in the reform process by nominating a new prime minister, who will be tasked with replacing the centre-left coalition that collapsed in October amid internal bickering.

Opinion polls show centrist incumbent Traian Basescu with about 35 percent support ahead of left-wing challenger Mircea Geoana on 30 percent. A third candidate, Crin Antonescu, has about 18 percent.

Surveys show Basescu and Geoana neck-and-neck in a run-off due on Dec. 6 if no one wins an absolute majority in Sunday's first round. Two polls have shown Basescu narrowly behind, but the results were within the polls' margin of error.

Around 18 million Romanians can vote on Sunday. Polling stations open at 0500 GMT and close at 1900 GMT.

If re-elected, Basescu may try to revive his efforts to counter pervasive corruption and would likely work closely with the central bank on stabilising the economy.

But political analysts say he would have to tone down his confrontational style, which has angered his rivals and discouraged voters.

"He is a very strong character. Not everybody tolerates that," said Laura Stefan of the Romanian Academic Society think-tank.

"But his attitude towards justice reforms is of crucial importance. He defended these ideas when no one else would."

CRUCIAL POINT

Whoever forms the new government will have three election-free years to slim the bloated public finances and clean up a political class steeped in murky deals and graft.

Its main task will be to win back the trust of international lenders, including the IMF and the European Commission, and restore investor confidence damaged by political instability and back-pedalling on reforms.

Broad reforms are vital -- 20 years after the end of communist rule the Balkan country of 22 million is one of the poorest and most graft-prone corners of the European Union.

The economy is expected to shrink seven percent in 2009, millions of Romanians live on less than a 100 euros ($149) a month and no top officials accused of graft have been convicted.

Although both Basescu and Geoana say they will mend relations with the IMF and meet aid terms quickly, analysts say reforms will stagnate if Geoana's Social Democrats (PSD) form the next cabinet.

Basescu will push for a prime minister from the centrist Democrat Liberal Party, which now runs a caretaker government.

"Should ... Geoana win the presidency, expectations of a PSD-dominated government will increase, suggesting a more tempestuous relationship with the IMF and EU," said Jon Levy from the Eurasia Group think-tank.

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