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Romania: Government Undergoes Re-shuffle

Bucharest, 2 December 1997 (RFE/RL) -- Romania's Cabinet faces a reshuffle this week - two months after it was announced - amid strong criticism of the slow pace of implementation of economic reform.

Prime Minister Victor Ciorbea is expected to announce the government changes Tuesday (Dec. 2) evening in a press conference, together with a statement after one year as government chief.

Over the weekend, three ministers announced their resignations: Finance, Youth and Sports, and Culture Ministers. Ciorbea accepted the first two, but asked the Culture minister to retain his job.

Our Bucharest correspondent cites Romanian reports as saying other ministers expected to be changed include the Ministers of Reform, Industry, Education and Health.

Sunday, Ciorbea explained the long delay of the reshuffle by saying there had been lengthy negotiations on the structure of a new Ministry - The Privatization Ministry - to replace the Reform Ministry.

Romanian media, on the other hand, said the delay was caused by quarrels in the government's four-party coalition over portfolios. The changes are not expected to affect the junior coalition partner, the Democratic Party of Senate Chairman, Petre Roman. Foreign Minister Adrian Severin and Defense Minister Victor Babiuc are both from Roman's Democratic Party.

The bulk of the reshuffle is expected to be supported by the Senior Christian-Democrats and the Liberals. Under the umbrella of the Democratic Convention these two parties won the Parliamentary elections of November, 1996, but were unable to form a majority government. With the Democrats and the ethnic Hungarian party, they formed a centrist coalition 12 months ago. They pledged shock-therapy economic reforms, legislation to bring the country into compliance with European Union standards, and to privatize money-losing state enterprises and the state banking sector.

After a year in office, the government is criticized by coalition members and the opposition alike for failure to implement major programs, such as: comprehensive privatization, land reform or a foreign-investment law. And delays have been cited in implementing reform legislation for state banks privatization - and also for the slow pace in closing loss-making industries.

At the same time, price-and-currency liberalization in Spring resulted in high inflation and a further decline in the standard of living across the country - and, this led to mass demonstrations last month by trade unions.

Other setbacks for the government were the delay of parliamentary debate on the draft 1998 budget until January, and the delay of a new tax law. The Central Bank's also failed to meet International Monetary Fund guidelines on currency convertibility, which was intended to help attract foreign investment, and the Bank delayed plans for a program to boost local investment.

Romania's inflation rate forecast for all of 1997 is as high as 140 percent. Industrial output continues to decline. The trade deficit continues to grow, the currency (leu) declined ten percent (against the dollar) in the last three months, and the value of shares on the Bucharest Stock Exchange has declined 50 percent in less than five months.

Increasingly, political analysts in Bucharest turn their attention to Prime Minister Ciorbea and his perceived inability to govern. Ciorbea is seen as influenced by the constant pursuit of influence by party leaders within the coalition. The analysts suggest a technocrat government would be preferable to the current political struggle.

A leading Romanian newspaper commentator, Cornel Nistorescu, wrote in today's (Monday's) daily editorial that the reshuffle means recognizing the need for a change inside the Government "in order to make reform more coherent, to revitalize the economy and increase the velocity for surpassing a time of confusion, indecision and poverty."