Romania's new coalition finalises government, endorses PM to defuse crisis

Romania's ruling Liberals and the leftist Social Democrats finalised their planned coalition on Monday and agreed to endorse retired army general Nicolae Ciuca as prime minister, hoping to end a two-month long political stalemate.

Romania, one of the European Union's poorest members, has been in political paralysis since a centrist coalition government splintered in September, threatening economic recovery and efforts to cut large budget and trade deficits.

The Liberals and their junior partners, the ethnic Hungarian UDMR, and the Social Democrats (PSD) said they would install a cabinet on Nov. 25, to fight the deadliest Covid-19 wave since the start of the pandemic.

The coalition will rotate prime ministers every one and a half years, with the PSD holding the powerful finance, farming, defence and transport ministries and the Liberals at the helm of the justice and energy departments.

Centrist President Klaus Iohannis is expected to officially designate the Liberals' Ciuca, 54, later on Monday after talks with all parliamentary parties, with the government set to easily win parliament support in a vote of confidence on Thursday.

The three parties jointly control 65% of the seats in parliament. Analysts, however, have said a political setup of centrists and leftists could find itself on a bumpy road in the months ahead, potentially due to different views on reforming the judiciary.

"We assessed a governing programme and a structure for a new government was voted on. The social package is the most important for us," PSD spokesman Radu Oprea told reporters, noting it allowed for an increase in pensions, allowances and the minimum wage.

The coalition agreed to raise pensions by 10% next year along with other measures, including hiking child benefits, which will cost an overall 13.6 billion lei ($3.1 billion).

A one-off payment will be given to retirees with small pensions to meet energy bills this winter.