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Romanian Prime Minister Sorin Grindeanu speaks as he delivers joint statements with his Israeli counterpart Benjamin Netanyahu in Jerusalem May 4, 2017. REUTERS/Abir Sultan/Pool


By Radu-Sorin Marinas and Luiza Ilie

BUCHAREST (Reuters) - The ruling Social Democrat (PSD) Party withdrew its support for Prime Minister Sorin Grindeanu on Wednesday, clearing the way for a new cabinet, shortly after a junior ally pulled its ministers out of the government. Grindeanu, a Social Democrat, has been under pressure to reshuffle his team, with some senior politicians from both the PSD and ALDE accusing his cabinet of poor performance and failing to uphold the governing programme.

The PSD wound up a week-long performance review of Grindeanu's six-month old cabinet on Wednesday evening. The programme, promising tax cuts and big wage hikes, delivered the party a sweeping election victory and a comfortable parliament majority in December.

"Out of 390 measures in the governing programme, some 260 have not yet been implemented," ALDE leader Calin Tariceanu told reporters after a meeting of party officials. "We're not talking here only about quantity, but of quality of the governing act."

Tariceanu said the partnership with the PSD was still valid, but the current team of ministers had failed to make genuine reforms of the education and health systems, to create a national sovereign fund as pledged, or to issue treasury bills for individuals.

Grindeanu has said he has no reason to resign. If he refuses to do so, the ruling coalition must file a vote of no-confidence against him in parliament and nominate a new premier.

If the government resigns there would be more delays in policymaking in the European Union's second-poorest state, which has massive healthcare and transport infrastructure needs.

Under Romanian law, the president must appoint a premier after consultations with political parties. The designated premier then needs to secure a vote of confidence from parliament, where PSD and ALDE control a comfortable majority.

Sergiu Miscoiu, a political science professor at Babes-Bolyai University, said there would be "no gain here for the Social Democrats - the party will see a huge loss of image, or what was left of it.

"The PSD's great advantage was unity and its capacity to mobilise, vertical decisions and discipline. These myths are gone now. To the extent that Grindeanu will resign, he will throw the ball into President [Klaus] Iohannis's court, who could appoint a technocrat," Miscoiu said.

Analysts have said the PSD's programme is based on an overly optimistic estimate of economic growth and could push the country's fiscal deficit above the EU's threshold with double-digit public-sector wage hikes and tax cuts.

Romania was the EU's fastest-growing economy in the first quarter, expanding by 5.7 percent, and its budget ran a small surplus at the end of April.

The legacy of Grindeanu's government also includes a failed attempt at the start of the year to decriminalise several corruption offences, a move foiled by the largest street protests in Romania since the 1989 fall of its communist regime.

(Writing by Radu Marinas; Editing by Mark Heinrich)

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