June 28, 2017 / 9:55 AM / a year ago

Few changes in new Romanian PM's cabinet after row over anti-graft laws

BUCHAREST (Reuters) - Romania’s prime minister designate said on Wednesday he would focus on implementing the government’s programme, as he presented a cabinet of mostly familiar faces after a rift over anti-corruption policy forced out his predecessor.

Economy Minister Mihai Tudose, Romania’s ruling Social Democrats pick to replace the prime minister they ousted last week, talks with media in Bucharest, Romania June 26, 2017. Inquam Photos/Octav Ganea/via REUTERS

Mihai Tudose was named premier after lawmakers from his Social Democrat Party last week ousted Sorin Grindeanu for failing to stick to legislative plans that helped them win an election in December.

But critics said that, with some leading political figures facing allegations of graft, Grindeanu was more likely fired for not doing enough to water down anti-corruption legislation.

“I don’t feel like I won a prize,” Tudose told reporters as he prepared to seek parliamentary approval for his cabinet. “I was designated ... to go work for the country. The top priority will be implementing the governing programme.”

The leu was up 0.3 percent to the euro at 1505 GMT, boosted by hopes of an end to the political crisis that pushed the currency to a five-year low earlier this month.

Romania is the European Union’s fastest-growing but least-developed economy, and its authorities have been under close scrutiny from Brussels as a crackdown on high-level corruption has exposed internal divisions.

The European Commission keeps its justice system under special monitoring.

An attempt in February by the outgoing cabinet to decree abuse of office offences exempt from prosecution below a certain amount of financial gain triggered the largest street protests in Romania since the fall of communism in 1989.

The decree was subsequently rescinded.

Most outgoing ministers featured again in the line-up Tudose and Social Democrat leader Liviu Dragnea presented on Wednesday.

Tudose is a close ally of Dragnea, who keeps a tight rein on the party and is himself currently on trial in an abuse of office case.

Tudorel Toader, who retained his portfolio as Justice Minister, has said he would seek a wide debate this time before, in line with a constitutional court ruling, setting a financial gain exemption cap.

In theory, the higher the cap, the greater an offending politician’s chances of being shielded from prosecution.

In the most high-profile cabinet change, Ionut Misa replaced Viorel Stefan as finance minister.


Both the finance and justice posts will play a key role as the Social Democrat-led government also seeks to answer critics over the state of the economy.

Its programme envisions hefty public sector wage and pension hikes, as well as a fiscal overhaul that includes income tax cuts and shifts the burden of social security contributions solely onto workers, not employers.

Those plans have raised concerns among analysts, the European Commission and the IMF, that Romania will overshoot the EU’s deficit ceiling of 3 percent of gross domestic product.

Another priority is setting up a sovereign wealth fund worth billions of euros and incorporating state-owned companies. Fund managers and brokers have said if done well, the fund would boost the performance of these companies.

However, it raises concerns over transparency, they added.

“The chances for the stability of this government are evenly split,” said Sergiu Miscoiu, political science professor at Babes-Bolyai University.

“One the one hand, we have a prime minister who is more loyal to the party leader. But within the government itself there are potentially clashing personalities.”

New Defence Minister Adrian Tutuianu will oversee an ongoing military acquisitions programme as Romania, on NATO’s European easternmost flank, boosts its military spending.

editing by John Stonestreet

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