Tough coalition talks seen after Romania vote

Romania's Social Democrat Party (PSD) which won Sunday's Parliamentary election, boosting its chances of returning to power after four years in opposition.

Once tainted by sleaze scandals and slow economic reforms, the PSD will have to negotiate a coalition arrangement with opposition rivals the Democrat-Liberal Party (PD-L) or outgoing Prime Minister Calin Tariceanu and his Liberals (PNL).

The PSD will likely demand that President Traian Basescu nominate its chief, Mircea Geoana, 50, as the Prime Minister.

Mr Geoana, former ambassador to Washington, is seen as a reformist within the PSD but his influence is limited by party stalwarts, such as former President Ion Iliescu.

Despite the win, which gives the PSD bargaining power, Mr Basescu is not obligated by law to nominate a premier from the winning party and may opt for a politician from the PD-L, or for a non-party technocrat.

The president has said he would wait until after results are validated by the Electoral Commission, which he thinks will be around Saturday, before making the nomination. The premier then has 10 days to form a government and seek approval from the new Parliament.

The PSD may agree to cobble together a coalition with the PD-L or the PNL, whom it has tacitly supported in Parliament since a coalition between the PD-L and PNL collapsed last year.

Speaking shortly after exit polls came out, Mr Geoana said the party would not play second fiddle in any new government.

Iliescu, meanwhile, said he would not negotiate any deals with the PD-L. It is not clear which faction - Mr Geoana's or Mr Iliescu's - has the upper hand within the PSD.

Top officials from PD-L hinted they preferred to negotiate coalition agreements with the Liberals, then with the PSD, but to form a government they would have to overcome a deep rift between Mr Basescu and Mr Tariceanu which ruptured a partnership they had between 2004-2007.

Observers say Mr Basescu may try to form a grand alliance, pulling together all major parties. But this option, more than others, would be troubled by policy disagreements, particularly in terms of anti-corruption efforts.

Another scenario is a negotiation gridlock. If Mr Basescu refuses to give in, and insists on nominating a PD-L official without securing support from any other major party, Romania may hold early elections.

This would be a risk for Mr Basescu, whose own bid for re-election next year may suffer if he is seen as instigating instability at a time of mounting economic risks stemming from the global financial crisis.

Some analysts have said the PSD may join forces with the Liberals to suspend the president if he refuses to nominate a prime minister of their choosing. During his suspension, an interim President may be able to nominate another candidate.