04BUCHAREST3448 / 2004-12-15 17:09:00
Embassy Bucharest
                C O N F I D E N T I A L SECTION 01 OF 02 BUCHAREST 003448 
E.O. 12958: DECL: 12/14/2014 
     B. BUCHAREST 3421 
     C. BUCHAREST 3442 
Classified By: Political Section Chief Robert S. Gilchrist for Reasons 
1.4 B and D 
1. (C) Summary.  Center-left Social Democratic Party (PSD) 
Prime Minister Adrian Nastase is attempting to remain in 
power through a coalition deal negotiated before his December 
12 presidential defeat.  Two small parties -- the Romanian 
Humanist Party (PUR) and the ethnic Hungarian Party (UDMR) -- 
hold the balance and are sending mixed signals as to which 
way they will go.  President-elect Traian Basescu continues 
to insist on a government led by his center-right National 
Liberal-Democratic (PNL-PD) alliance.  Basescu's 
constitutional prerogative to appoint the new prime minister 
and call snap elections if the parliament fails to approve 
his cabinet give him the upper hand.  The ruling PSD is 
undergoing internal turmoil, with outgoing President Ion 
Iliescu poised to return to the helm of the party.  End 
2. (C) Contacts in both of the principal political blocs have 
approached post December 14-15 with information indicating 
the ruling Social Democratic Party (PSD) is pressing hard to 
keep intact its planned coalition with the Romanian Humanist 
Party (PUR) and the ethnic Hungarian party (UDMR).  The deal, 
which had been worked out among the three parties in the two 
weeks between the two rounds of presidential elections, 
assumed a Nastase win.  Moreover, Nastase used the fact that 
he had secured an apparent parliamentary governing coalition 
as a point to boost his standing during the campaign, the 
logic being that a PSD-led parliament would work best with a 
PSD president. 
3. (C) Prior to Basescu's win, PUR and UDMR contacts told 
post their parties were "extremely pleased" with the terms 
they had received in negotiations with the PSD.  While full 
details were not disclosed, the PSD had reportedly promised 
the ethnic Hungarians a vice premier slot and at least three 
ministerial portfolios, including Health, Transport, and 
Education.  PSD had similarly promised the PUR key positions, 
including a second vice premier slot, a key economic ministry 
and a newly created Ministry of Small and Medium sized 
Enterprises.  The negotiated deal was much better than these 
two parties had received during their earlier alliance with 
the PSD. In addition, as political insiders have noted to 
post, UDMR and PUR "feel comfortable" working with PSD, as 
they have a long history of collaboration. 
4. (C) However, the foundations of the PSD-constructed house 
of cards were severely shaken by the seismic impact of a 
clear Basescu victory.  December 13-15, as Basescu's win sunk 
in, both PUR and UDMR issued a series of conflicting 
statements about their future intentions.  Contacts within 
the parties confided that this reflected intense pressure 
applied from both PSD and PNL-PD and the new 
rules-of-the-game set by Basescu.  In contrast, one PNL-PD 
contact told post that he remained alarmed by the high price 
each of the two small parties sought to exact as its 
admission fee into a PNL-PD-led government.  Late December 
14, UDMR leader Marko Bela met with Basescu and likely PNL-PD 
prime ministerial designee Calin Popescu Tariceanu.  The 
following day, UDMR declined to sign a planned formal 
protocol setting in stone an alliance with PSD and PUR.  UDMR 
issued a statement that discussions would continue with both 
sides and that any protocol should be postponed. One PSD 
insider confided to post that despite intense ongoing 
negotiations December 15 between PSD and UDMR, ultimately an 
alliance between the two was "unlikely to gel."  Although PUR 
leader Dan Voiculescu has said his party would prefer an 
alliance with PSD, he also expressed a willingness to remain 
open to an agreement with PNL-PD as circumstances require. 
5. (C) Meanwhile, President-elect Traian Basescu remains 
firmly committed to a PNL-PD-led government, as he declared 
publicly during his December 13 presidential acceptance 
speech.  Given that the central plank in Basescu's campaign 
was combating what he called PSD-perpetrated corruption, few 
political analysts see any way he could allow PSD to remain 
in government.  To a great extent, the vote for Basescu was 
against PSD.  Despite some internal dissent, PNL-PD leaders 
meeting the week before December 12 elections formally set a 
policy that the alliance would exclude PSD from any 
PNL-PD-led coalition.  Any backtracking by the alliance would 
be perceived in the media and by the public as indication of 
insincerity by Basescu and the PNL-PD in their commitment to 
fight corruption and usher in reform.  Tariceanu reminded the 
press December 14 that PNL-PD had firmly ruled out any 
alliance or cohabitation with PSD.  Moreover, he asserted PSD 
efforts now to forge a parliamentary majority are only in 
play to allow PM Nastase's political survival. 
6. (C) At the same time, as president, Basescu will wield 
powerful constitutional prerogatives that give him an upper 
hand in shutting out PSD by designating a prime minister of 
his choice, likely to be Tariceanu.  Given that PSD on its 
own does not hold an absolute majority, post's view of the 
constitution indicates that Basescu is merely obliged to 
consult all the political parties represented in parliament. 
If Basescu's choice for PM does not succeed in forming a 
majority, he still has the option of forcing a minority 
government.  This is provided that such a government could 
survive a vote of no confidence.  Given that the parties and 
most MPs are reluctant to engage in another electoral 
campaign so soon, this is unlikely.  However, if a vote of no 
confidence were to pass, Basescu could call new elections as 
soon as 60 days after the first failed attempt to form a 
7.  (C) In a private conversation with the Ambassador on 
December 15, Basescu was clearly ebullient.  He presented a 
governing approach aimed at completing the 1989 revolution 
initiated, but subsequently hijacked, in his view, by second 
and third tier apparatchiks from the old regime. Like every 
other political adept in this town, Basescu had done the math 
and concluded that he can nominate a majority government, 
without cohabitation with the PSD.  Put quite simply, adding 
the UDMR, the PUR and 18 special seats reserved for ethnic 
minorities to seats won by the PNL-PD produces a 
parliamentary majority. 
8. (C) Naturally, the PSD has come to the same conclusion and 
has already made a serious effort at sabotage.  Basescu told 
the Ambassador that the PSD already showed him files throwing 
dirt on PUR leader Voiculescu, implying that such information 
could be brought to light to damage a future coalition.  The 
Ambassador observed that full transparency would be the best 
way of coping with this blackmail threat, but Basescu was 
quite confident he could build his government owing to his 
trump card ) the threat of new elections in which he 
believed he could handily prevail and win a clean majority of 
parliamentary seats.  In his words, &At the end of the day, 
if I explain to the population the situation, I will become 
more popular.8 
9.    (C) Basescu reiterated some of the same themes that he 
accented during his acceptance speech and campaign style 
appearance the previous night at Victory Square in front of 
the Palace of Parliament.  Basescu highlighted, however, the 
necessity of a fight against corruption, at both the top 
level of the political class and in the institutions of 
government that had come to serve the ruling party and 
favored individuals rather than the people.  Therefore, he 
concluded, he could not have cohabitation with those same 
individuals and political forces.  He offered that a few 
years in opposition would be good for both the PSD and 
Nastase, providing them the opportunity to rethink their 
politics and clean house.  He immediately added, however, 
that the PSD might be &irredeemable.8 
10. (C) Comment:  While PSD emerged with the largest 
parliamentary bloc in November 28 elections, Basescu's 
December 12 victory has delivered a tremendous blow to the 
bloc that has governed for 11 of the past 15 years.  Few 
Bucharest analysts believe Nastase can succeed in keeping his 
pre-set coalition intact, although tough bargaining positions 
by the PUR or UDMR with PNL-PD could change the outcome.  One 
Embassy contact has told us that the PSD is already 
undertaking internal changes, and that Iliescu is preparing 
to lead his party in opposition.  End comment. 
11.  (U)  Amembassy Bucharest,s reporting telegrams are 
available on the Bucharest SIPRNET Website: 

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