Romania's new prime minister-designate Liviu Negoita unveiled his cabinet on Monday in the hope of ending a month-long political crisis.

Opposition groupings, which dominate parliament, rejected a previous nominee of President Traian Basescu last week and made clear on Monday that they would not back Negoita, a Bucharest district mayor, either.

The groupings, including the leftist Social Democrats, have backed their own candidate in a tactical manoeuvre before the election, probably extending a policy stalemate until after a victor is chosen in an expected Dec. 6 runoff.

The standoff has already delayed a badly-needed loan tranche under a 20 billion euro, International Monetary Fund-led bailout originally slated for next month.

"Romania needs a government with full powers to negotiate with representatives of the international financial institutions," Negoita told reporters. "We need to be credible, we need to observe commitments."

The IMF walked away from a review of Romania's aid deal on Friday, saying it would return when a government was in place.

The delay of the 1.5 billion euro aid tranche at least until January could force Bucharest to cut spending or pay higher interest rates for debt. It may also determine whether Romania recovers from recession about now or not until next year.

Bucharest must persuade the IMF that it can approve a tight 2010 budget to stave off a financial crisis. It has so far failed to do so, and markets have punished it.

Rising yields on Romanian debt have forced the government to reject all bids at a string of tenders, while the price of insuring the country's debt has soared.

This is not expected to improve soon, particularly after the opposition rejected Negoita's proposed cabinet on Monday.

"We will not endorse it ... A Negoita government has no other scope but to stall (before the election)," Social Democrat leader Mircea Geoana told reporters.

Following a no confidence vote last month that toppled Prime Minister Emil Boc, who remains as a caretaker until a new government is formed, the main obstacle has been wrangling between Basescu's Democrat-Liberal allies and the Social Democrats.

The presidential election will be one of the most important votes in Romania's post-communist history, pitting Geoana and another opposition leader, whose parties together control 65 percent of parliament, against the incumbent Basescu.

Whoever wins will choose the next two prime ministers and influence long-delayed reforms.

Negoita's cabinet, backed by the ruling Democrat-Liberals, retains seven ministers from Boc's outgoing cabinet, similar to that of previous prime minister-designate Lucian Croitoru's lineup which was rejected last week.

Reuters

Güncelleme Tarihi: 09 Kasım 2009, 22:45