One of the largest mass protests since the fall of Communism in 1989 hit Bucharest on Wednesday over deep government spending cuts, casting doubt on Romania's ability to meet its IMF loan commitments. Analysts say the government may end up bowing to public pressure and softening the planned cuts in a bid to preserve popularity for its shaky parliamentary majority, even though elections are not scheduled until late 2012.
The demonstration by some 30,000 people including teachers, nurses, pensioners and transport workers was the first serious test of the six-month-old centrist government's determination to force through austerity measures, required to secure international aid for the recession-hit economy.
"Protests will be worse than in Greece," said 62-year old pensioner Maria Ungureanu, who joined in shouts calling for the resignation of President Traian Basescu. "We have to protest violently to make the government step down. I am willing to die in the streets, maybe my children and grandchildren will live a better life." Romania's leu fell 0.3 percent to 4.199 per euro by 1042 GMT and the country's blue chip BET share index was down 1.6 percent, while the cost of insuring Romania's sovereign debt edged higher.
International Monetary Fund-led aid packages across recession-hit emerging Europe have hit state workers and pensioners and the protest in Romania, the second poorest European Union state, raises the spectre of debt-wracked Greece. Romania's 20 billion euro IMF-led bailout package is crucial for the government's ability to finance its ballooning budget deficit, an issue highlighted by two failed debt auctions earlier this month when investors feared the government would backtrack in the face of mounting social pressure. Bucharest has promised cuts to state wages of 25 percent and to pensions of 15 percent as part of an effort to secure the release of the next tranche of loans.
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