Romania’s government was overthrown in a no-confidence vote in parliament earlier Friday. The motion passed 235 to 9 and President Traian Basescu is expected to designate a new prime minister following consultations with the parties.
“The composition of the next government is uncertain, with at least two options on the table for President Basescu: either a technocrat government supported by all political parties or a government led by Ponta,” Erste told Mediafax reporters.
The main drawback of a technocrat government would be its limited ability to make important decisions for Romania’s future economic development, before the regular parliamentary elections scheduled for November, Erste said.
On the other hand, Ponta has the advantage of being supported by the National Liberal Party, among others.
“As the Social Democrats and the Liberals are in pole position for winning the November parliamentary elections, this could be a better alternative for the long-term political stability,” the Austrian bank said.
Romania’s leu fell to an all-time low of 4.4 units against the euro in the first trading hour after the government collapsed. Erste analysts believe the central bank is bound to keep its key rate unchanged at 5.25% a year at its monetary policy meeting next week.