The country’s center-right government led by Mihai Ungureanu was overthrown in a non-confidence vote last Friday, less than three months since it came to power. Ungureanu had replaced Democrat Liberal Emil Boc, who stepped down early February following weeks of street protests against austerity measures.
“This second government collapse in Romania within three months is credit negative, increasing policy uncertainty and threatening reform implementation,” the rating agency said.
Moody’s has Romania on a “Baa3” rating, with stable outlook.
The agency noted that, although the prime minister-designate Victor Ponta affirmed his commitment to continue a fiscal and economic program agreed with the international partners, the current unpopularity of fiscal austerity in Romania limits the prospects of the government pursuing reforms before elections in November.
“Policy paralysis would make borrowing conditions more challenging for the government, which needs to refinance $13 billion of government debt over 2012,” Moody’s said.