Romania Leftists Gain Ground In Coalition Talks

President Traian Basescu, who nominates the prime minister, began talks on Friday to pair up the PD-L, a centrist grouping.

The Romanian Social Democrats (PSD) appeared closer to securing a place in a coalition government on Friday after Sunday's inconclusive parliamentary election narrowly won by the Democrat-Liberal Party (PD-L).

President Traian Basescu, who nominates the prime minister, began talks on Friday to pair up the PD-L, a centrist grouping , with another party.

Observers say his nominee may try to revive a centrist alliance with the Liberal Party (PNL) of outgoing Prime Minister Calin Tariceanu that broke up last year in disputes between Basescu and the premier.

But many say the ex-communist PSD, once tainted by slow reforms and sleaze scandals, has gained ground in recent days because of the PNL's insistence on keeping the premier's job.

"The most likely combination is between the PSD and PD-L, given the past history of bickering among the centrists," said Mircea Marian, commentator for Evenimentul Zilei daily.

A quick agreement is critical to Romania's ability to safeguard the economy from a possible financial crisis next year and Basescu has hinted he would make a choice next week.

Either option may be plagued by personality clashes with divisions running deep among many politicians, observers say.

And while inviting the leftists, who came a close second in the ballot, would create a larger parliamentary coalition, it may force the Democrat-Liberals to compromise on fiscal policy restraint and efforts to fight endemic corruption.

"These discussions are intended to gauge how the next parliamentary majority can be built," Basescu said.

Basescu has repeatedly said he wanted a "strong" coalition able to tackle economic challenges next year, but he has alienated many in the ruling elite since becoming president in 2004 with his often scathing criticism of patronage and graft.

NUMEROUS CANDIDATES

A policy logjam since the Democrat-Liberals and the PNL split has left Romania poorly prepared for next year's expected sharp economic slowdown and drove two rating agencies to downgrade the country to sub-investment grade.

The liberals, like the Democrat Liberals, strongly back Romania's flat tax, which the PSD may want to lower for the poorest, and share strong concerns about graft.

But analysts say Basescu may not want the powerful leftists in opposition when his presidential term expires next year. The PSD had seemed opposed to joining the Democrat Liberals, but some senior party officials have signalled a change recently. "Considering the way things look at the moment, obviously we are more flexible than we were before elections ... We are closer to PD-L," said Miron Mitrea of the PSD.

Basescu has given few clues as to who he might nominate for prime minister and local media have listed a dozen possible names.

Romania joined the EU last year thanks to economic and judiciary reforms introduced by the centrists to open up markets and fight corruption, an endemic weakness, after years of Socialist rule mired in scandals and slow transition.