Romania delays impeachment decision to September
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Emerging Markets

Romania delays impeachment decision to September

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Uncertainty surrounding the outcome of a referendum to oust the Romanian president continues, with more market pressures predicted

Romania’s Constitutional Court, which has to rule on whether a recent referendum to remove President Traian Basescu from office was valid, postponed a decision on the issue for September 12, Romanian media reported, quoting judges from the court.

A referendumwas held at the weekend to decide whether center-right Basescu should be ousted but it failed because, according to official results from the Central Electoral Bureau, not enough people went to the polls.

However, the Constitutional Court must validate the results for Basescu to resume his position and judges at the court said they needed more time to study the lists of voters.

According to the official results, only 46 percent of the total number of voters on the lists took part in the referendum, well short of the 50 percent plus one needed to validate its results, but the governing center-left coalition challenged this, saying the lists of voters were old and showed an inflated electorate.

Basescu’s popularity took a strong hit, with 88 percent of those who did vote saying he should go.

The Constitutional Court’s decision came after the close of the Romanian stock and currency markets, but analysts said it does not bode well for investor confidence in the country.

“It just adds another layer of uncertainty, really, to Romanian politics. The general feeling is that investors have lost confidence,” William Jackson, emerging markets economist at Capital Economics, told Emerging Markets. “It certainly won’t ease pressure on the currency.”

The leu hit record lows last week as investors were spooked by the possibility that the center-left coalition - which took power in the spring after two consecutive pro-Basescu governments collapsed – would succeed in sacking the president.

It rebounded by around 1 percent on Monday when the referendum results were announced.

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