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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


By Luiza Ilie and Radu-Sorin Marinas

BUCHAREST (Reuters) - Romania's ruling Social Democrats picked Economy Minister Mihai Tudose to replace the prime minister they ousted last week, trying to resolve a political crisis that may erode investor confidence in the country despite its fast-growing economy.

Social Democrat (PSD) lawmakers voted out their own cabinet in a no-confidence motion on Wednesday, accusing then premier Sorin Grindeanu of failing to implement an ambitious governing programme that helped them win a December election.

Analysts said many party members were unhappy with Grindeanu's failure to relax anti-corruption rules. His government had to withdraw a decree that decriminalised some graft offences after massive street protests in February.

PSD leader Liviu Dragnea said Tudose was one of six potential prime ministers the party considered, but the other five had declined the position.

He did not elaborate, but their reluctance could be tied to the abrupt way in which the party ousted their first premier. All but four senior party members ultimately voted to support Tudose and potentially end the policy deadlock that started when the party withdrew support from Grindeanu two weeks ago.

Tudose's name has been presented to the president.

"If all goes well and the president approves the nomination, we can have a new government approved in parliament late on Thursday," Dragnea told reporters.

If President Klaus Iohannis, a centrist, does not endorse the candidate, any continuation of the deadlock could cripple policymaking and weigh further on the leu currency which fell to its weakest level since 2012 last week.


The rifts have kept investors wary about Romania in recent weeks despite the eastern European Union state posted annual growth exceeding 5 percent in the first quarter.

Tudose, who had also served as a minister under ex-PM Victor Ponta, has voluntarily given up his doctoral title in 2016 after accusations of plagiarism. Some political analysts said this may be a reason for the president not to support his nomination.

Iohannis has said he will only agree to a person with integrity.

"I do not think the president will accept the proposal because of the suspicions of plagiarising," said Sergiu Miscoiu, political science professor at Babes-Bolyai University. "It feels like a test of Liviu Dragnea to see who can get accepted."

Under a PSD premier, government policies would likely continue to bend towards the public sector wage hikes and tax cuts that have raised concerns of fiscal slippages with the European Commission and the International Monetary Fund, analysts said.

"We see no major shifts in government policies, except for the possibility of a bigger push for less stringent anti-corruption laws," Nordea analysts said in a note.

However, any further attempts by the ruling coalition to weaken anti-corruption legislation could reignite street protests.

Catalin Tenita, an IT entrepreneur who co-founded Geeks for Democracy, an online platform seeking projects to improve governance, protested throughout February. He said on Monday that he would take to the streets again if needed.

"It is difficult to predict what the ruling coalition will do, but the past has shown us they have consistently tried to weaken the fight against corruption," he told Reuters.

Romania is the European Union's fastest growing economy but one of its poorest and most corrupt states, with massive investment needs in its underdeveloped transport, healthcare and education sectors.

(Editing by Krisztina Than and Alison Williams)

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