Romania govt coalition shatters

The centrist Democrat-Liberal (PD-L) can rule alone for a few weeks but will have to win parliament's approval for new ministers to replace the Social Democrats, making the support of centrist and ethnic Hungarian opposition key to their survival.

Even if their minority government survives, they face an uphill battle to win support for difficult fiscal reforms that have riled workers from Romania's vast public sector.

The coalition went sour this week when Prime Minister Emil Boc suddenly sacked interior minister Dan Nica -- a Social Democrat -- and proposed a replacement from his own party.

On Thursday President Traian Basescu, who has links to the PD-L, approved Nica's dismissal.

"All PSD ministers, supporting Dan Nica, are announcing their resignation from government," Social Democrat leader Mircea Geoana told reporters after an emergency party meeting. "The president succeeded in triggering a political crisis."

Economists said the break-up of the coalition put in question Romania's ability to meet fiscal targets set by the IMF in return for the 20 billion euro aid package it led for Romania this year.

"It's still very early days and one should be careful in jumping to conclusions. But of course one needs to see how a minority government, if that's what we do get, can continue to adhere to the IMF programme. That's key," said Koon Chow, strategist at Barclays Capital.

Romania went through a sharp economic reversal in the last year as a result of the global financial crisis. It shifted from being the European Union's fastest-growing economy to one in dire need of IMF aid to combat deep recession.