Court confirms re-election of President Basescu

REUTERS - A Romanian court declared President Traian
Basescu victor of a closely-fought election on Monday,
handing him a second 5-year term and the power to end a
political crisis that has threatened an IMF-led aid deal.

The Constitutional Court unanimously rejected a complaint by
Social Democrat leader Mircea Geoana, who lost by a razor thin
margin and accused the former sea captain incumbent of stealing
a Dec. 6 runoff through widespread multiple voting and bribery.

The ruling opens the way to resolution of a months-old
political crisis that has blocked policymaking, led to the fall
of a Basescu-allied cabinet, and put a 20 billion euro ($29.33
billion) International Monetary Fund-led aid deal on ice.

Analysts said Basescu's victory would lead to the quick
formation of a new government but long-simmering animosity
between the Black Sea state's major political forces could
create instability in the medium term.

That was evident in the response of Geoana, a former foreign
minister and ambassador to Washington who had a wide lead in
opinion polls ahead of the vote, when he conceded defeat but
maintained his accusation that the vote was rigged.

"I accept the Court's decision ... and I wish Traian Basescu
good luck," he told reporters, adding: "The suspicion of fraud
in this election will follow Romania and our democracy."

Basescu was not expected to make a statement on Monday.

A recount of 138,000 annulled votes did not change an
official outcome giving Basescu a 70,000 vote edge.

The ballot was one of the most important here since the
Black Sea state of 22 million overthrew and shot Stalinist
dictator Nicolae Ceausescu 20 years ago this month.

The victor must quickly create a government and pass a
cost-cutting budget to reopen the taps of international aid that
it needs to finance its budget and claw its way out of an
economic contraction expected to reach 8 percent this year.

Government needed

Political analysts said Basescu, 58, would likely form a
government quickly but could struggle to rein in an abrasive
style that has caused clashes with rival parties and led to the
collapse of two governments in his 5-year term.

He will now have three election-free years to influence
long-delayed policies to overhaul Romania's bloated public
sector, a main reason the country is ranked the second poorest
and most corrupt member of the European Union.

His first priority will be naming a new prime minister to
replace Emil Boc, who has stayed on in an interim capacity since
opposition parties toppled his cabinet with a no-confidence vote
in October.

The administration must quickly negotiate a cost-cutting
2010 budget with the IMF, which sent a three-day mission to
Bucharest on Monday, and unlock a 1.5 billion euro aid tranche
put on hold in November.

Parties have already started talks. Basescu wants his
Democrat-Liberal allies to lead a centre-right government, and
the party has invited Geoana's pre-election ally, the opposition
Liberals, to form a coalition.

The Liberals said on Monday they would start talks with all
parties but would not join a government unless the prime
minister came from their ranks or was a well-known independent.

Analysts said Basescu's endorsement of IMF-prescribed
austerity measures aimed at cutting the 2010 budget deficit to
5.9 percent of gross domestic product, from 7.3 percent this
year, could fan discontent.

The Fund has not specified measures, but sources familiar
with the talks say they include a recommendation to cut up to
150,000 posts from the 1.3 million-strong public sector, which
makes up a third of all jobs and is a millstone on the budget.

Analysts said Basescu would muster a majority and could even
have a draft government plan in place by the end of the week,
although clashes with rivals would persist in a landscape
virtually identical the bitter pre-election battleground.

"The crisis and political deadlock have not changed," said
political analyst Stelian Tanase.

"The economic situation next year will be more dramatic than
in 2009. The IMF is stringently asking for public spending cuts.
Unemployment will rise and social tensions too."