Reuters: US Dollar Report: UPDATE 1-Romanian government falls on confidence vote

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UPDATE 1-Romanian government falls on confidence vote Apr 27th 2012, 12:37 Fri Apr 27, 2012 8:37am EDT * Raises prospect of months of political turmoil * Czech confidence vote due later in day By Luiza Ilie BUCHAREST, April 27 (Reuters) - Romania's centre-right government collapsed on Friday when it lost a vote of confidence two months after taking office, raising the prospect of months of political turmoil and casting doubts on an austerity programme. The surprise result, along with another confidence vote in the Czech Republic due later on Friday, underscores dissatisfaction with belt-tightening even in countries which are not part of the debt-plagued euro zone. Romania, the European Union's second-poorest member, cut salaries and raised sales tax to put its economy on a more solid footing. But austerity was a drag on economic recovery and has now brought down the short-lived government of Prime Minister Mihai Razvan Ungureanu. The vote of no confidence had the backing of 235 MPs, four more than the 231 needed to topple the government. "A new and better government will be coming," opposition lawmaker Dan Rusanu said. A second, government lawmaker confirmed the count. President Traian Basescu, a close ally of Ungureanu, must nominate a new prime minister who will have to gain parliament's backing. It could be a complicated process due to the split of parties and it may be months before a new government is in place. The country's International Monetary Fund-led deal is key to maintaining investor confidence and the uncertainty will raise doubts over whether it will stay the course. The leu currency , which dealers say the central bank often supports in the market, was a touch lower after the vote. The Social Liberal Union (USL), a fragile leftist alliance, has more than 50 percent support in opinion polls and would be favoured to win a parliamentary election, due to be held in November. Failure to back a new prime minister before that would prompt an early vote but probably only a few months ahead of schedule. Link this Share this Digg this Email Reprints

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