President Traian Basescu was suspended by the Parliament with a crushing majority of votes - 322 in favour of suspension and 108 against. The debates in Parliament and the announcement of the ballot results caused turmoil on the financial markets, in particular as the President had announced he would resign "within five minutes" after the Parliament voted to suspend him.
President Traian Basescu had not announced his resignation by the time this story was ready for print, although two days before he had said he would resign five minutes after suspension.
The suspension proposal that came from PSD (Social Democrat Party) needed 235 votes to pass. The ballot results show many of the PNL (National Liberal Party) and UDMR (Democratic Alliance of Hungarians in Romania) MPs voted in favour of PSD's action yesterday. Basescu did not participate in the Parliamentary session and did not reply to the accusations the opposition levelled against him, although he was invited to attend.
On Wednesday night, he warned the MPs not to vote for the suspension, as it would plunge Romania into a crisis, would affect the country's rating and scare investors away. However, he made no comments regarding his resignation during his speech on Wednesday.
The Romanian economy has been growing steadily over the last three years primarily because of investments and consumption, which have received a boost from the flat tax. Decisions regarding taxation levels, which are probably the worst fears investors have in case of a change in political power, are not for the President to make, who has very little say in economic matters.
The exchange rate was quick to rise from 3.3350 to 3.3420 RON/EUR. At this level, however, investors were encouraged to sell their foreign currency, which foreign investors did, as well, so that the euro returned to 3.3360 RON until the market closed.
"The reaction of the market was predictable, since players had anticipated the Parliament's decision. Positions had been accumulated over the last two days and the jump was only caused by some late comers," commented Dragos Balaci, head dealer of ABN Amro Romania.
The stock markets fell yesterday, though rather unconvincingly throughout the parliamentary debates, the voting, and after the results were made public. Immediately after the vote made by the Parliament, Premier Calin Popescu-Tariceanu asked the President, during his statement from the Government headquarters, to resign as he had stated he would.
Tariceanu, who is also a deputy, attended the Parliamentary session yesterday morning but did not vote. Tariceanu said that in case he resigned, Basescu would no longer be able to seek a new presidential term.
If Basescu resigns, early presidential elections will have to be organised within three months. During this period of time, he will not enjoy immunity and will be able to be a member of a political party. If he does not resign, then a referendum will be held within the month entitling all citizens with a right to vote, to decide whether they agree with President Traian Basescu or not.
While the presidential position is vacant, the interim president position will go to the second highest-ranking official of the state, the Senate chairman Nicolae Vacaroiu (PSD).
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