Cejiss

Romanian prime minister Emil Boc has announced his resignation in the wake of three weeks of protests against the government's austerity measures. He said his aim was to "defuse political and social tension".

Since mid-January Romanians have taken to the streets to demonstrate their anger at the policies of Boc's administration – which have included a 25 per cent cut in public sector wages, a freeze on pensions and an increase in sales tax from 19 to 24 per cent. The pressure on the government intensified last week when two members of parliament defected, depriving the ruling party of its majority in the upper house.

The austerity measures were introduced in 2010 to meet the conditions of a €20bn loan Romania negotiated with the International Monetary Fund, European Union and World Bank to pay for salaries and pensions, after the economy contracted by more than 7 per cent in 2008 and 6.6 per cent in 2009.

However, last year Romania returned to growth of 1.7 per cent, and the IMF forecasts an expansion of between 1.5 per and 2 per cent this year – down from earlier predictions but still ahead of the EU average. Boc, who has been in power since 2008, said: "I know that I made difficult decisions, but the fruits have begun to appear". He added that the government was "not in popularity contest" but was "saving the country".

Elections were not due until November and today Traian Basescu, Romania's president, appointed Boc's justice secretary Catalin Predoiu as an interim prime minister. The government has been trailing badly in opinion polls to the left-wing opposition led by Victor Ponta.

In an article for PublicServiceEurope.com last month with the president of the Party of European Socialists, Sergei Stanishev, Ponta wrote: "The Romanian people demand early general elections that are, above all, free and fair. This is why we believe that it is crucial to establish a short-term, transitional technocratic government to guarantee that these elections are conducted now and conducted fairly."

The duo added: "Romanian citizens have been punished twice: with an irresponsible, short-sighted handling of the economic crisis by a right-wing government; and with the curbing of basic civil rights and the relentless ambition of conservative leaders. These are the self-same ones who today take to the street to call for justice. In the face of such democratic erosion, only one viable solution can be concluded – the immediate declaration of national elections. Only then can Romania start the process of rebuilding."

The leader of the opposition Liberal Party, Crin Antonescu, was also damning, describing the outgoing administration as the "most corrupt, incompetent and lying government" since the 1989 anti-communist revolt.

Meanwhile the agreement with the IMF should not be affected by the resignation, according to the Washington based fund's Bucharest mission chief Jeffrey Franks. Speaking to Reuters he said: "I see no reason necessarily for this to have a material effect on the aid agreement. We have every expectation the agreement will continue." Romania also agreed a precautionary €5bn credit line with the IMF last year for emergency use but Franks added in a press conference: "Romania is better prepared than other EU countries to cope with the economic crisis."

In a statement today, the IMF, European Commission and World Bank said Romania's economic programme was "on track" and that fiscal consolidation had improved the country's credibility. The statement followed the three organisations' regular review of Romania's progress and was based on a visit by officials between January 24 and February 6, before Boc announced he was stepping down.

Romania joined the EU in 2007 and is the bloc's second poorest member state. Following the prime minister's resignation Romanian stocks slumped, Bloomberg reported, with the BET index of shares falling 2.3 per cent just after midday in Bucharest. The Romanian leu slid 0.1 per cent against the euro.

The article is republished with permission of PSE. Copyright and original publication by PSE.