Romania's pro-European government collapsed in a parliamentary no-confidence vote on Wednesday after only three months in office, bringing the EU member closer to early elections.
A total of 261 of 465 MPs voted in favour of a motion against the minority government led by Ludovic Orban, which took over in November.
"The Orban government fell. It's a very big step for Romanian democracy," said Marcel Ciolacu, leader of the opposition Social Democrats (PSD), which had launched the motion.
The move was triggered by Orban's attempt to change the law for local elections, which the PSD saw as a threat to its chances in a poll due in June.
Orban had wanted to reintroduce a two-round voting system, but the change will no longer be implemented.
Paradoxically, the government's collapse might benefit Orban's National Liberal Party (PNL), which wants early polls in the hope of capitalising on a series of victories in the past year.
A recent opinion poll suggested PNL was riding high, with 47 percent support compared with 20 percent for PSD.
"We'll land on our feet. We were judged by a toxic alliance that lost people's support," Orban told reporters after the vote on Wednesday.
"Romanians will soon be called to decide the country's fate. We lost a battle, but we will win the battle for Romania."
Romanians have grown frustrated over persistent corruption, which has implicated the highest echelons of the PSD - the party's former leader Liviu Dragnea was jailed for corruption last year.
President Klaus Iohannis must now appoint a new prime minister, who in turn must try to assemble a majority, unlikely to be easy in a fragmented parliament.
Iohannis, a vocal PSD critic, said he would consult with political parties on Thursday to appoint a new prime minister although he supported early elections.
A snap poll "is the best solution," he said, accusing the PSD of having "blocked reforms" during its three years in power.
According to the constitution, the president can dissolve parliament only after two failed attempts to instal a new executive within 60 days.
The Liberals intend to propose to Iohannis to reappoint Orban, hoping that he would fail to get the parliamentary support. That would bring them closer to their goal of early elections, which would be held close to, or at the same time as, the local elections expected for June.
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