Emil Boc, who has been prime minister since 2008, said he was resigning "to defuse political and social tension" and make way for a new government after thousands of Romanians took to the streets in January to protest salary cuts, higher taxes, and widespread perception that the government was not interested in the problems of ordinary people in this nation of 22 million.
Opposition parties late Monday called for President Traian Basescu to resign and for early parliamentary elections to be held during a meeting with the president and all the political parties at the Cotroceni presidential palace.
Basescu appointed Justice Minister Catalin Predoiu — the only minister in Mr. Boc's Cabinet not a member of any political party – as interim prime minister pending the formation of a new government. If Parliament does not approve a new executive in 60 days it will be dissolved and new elections will be called. The ruling coalition and its partners from minorities, however, have enough votes to elect a new government.
In his first public appearance, Predoiu said he would serve as prime minister for a limited period, and with limited powers until a new government is formed.
The decision comes as the country is starting to feel the effects of the widespread cuts that the government put in place in exchange for a €20 billion ($26 billion) loan from the IMF, the European Union and the World Bank in 2009, to help pay salaries and pensions after its economy shrank by more than 7 percent.
In 2010, Boc's government increased the sales tax from 19 percent to 24 percent and cut public workers' salaries by a quarter to reduce the budget deficit.
The head of the IMF mission to Romania, Jeffrey Franks, said Sunday he was confident that economic reforms demanded by the IMF in exchange for the loan would continue even if the current government was no longer in office.
Boc urged the country's feuding politicians to elect a new government quickly. He said had taken "difficult decisions thinking about the future of Romania, not because I wanted to, but because I had to."
"There is a lot of resentment," said Christian Mititelu, a political commentator and former head of the BBC Romanian service. "The austerity measures seem to have penalized those who worked for the state, retirees, and people who depended on social security."
Political commentator Radu Tudor said Boc's resignation was merely a ploy by the president to boost the election chances of the ruling Democratic Liberal Party, which Basescu used to lead, by getting rid of an unpopular government. Basescu was elected president in 2004 and his mandate expires in 2014. Parliamentary elections are currently scheduled for November.
Romania's problems go deeper than its economic woes. Deep hostility between the government and opposition parties is reflected daily in the media. Opposition politicians and journalists who are critical of the government claim they are harassed.
Basescu, who is criticized for being outspoken and confrontational, says he is committed to reform and is openly disdainful of the opposition. He has been credited by the IMF for his reforms and attempts to fight corruption.
During the Monday talks at the palace, opposition politicians hailed the government's collapse.
"This is a victory for those that demonstrated on the streets," said Crin Antonescu, who heads the opposition Liberal Party. "The most corrupt, incompetent and lying government" since the 1989 anti-communist revolt has gone, he said.
Victor Ponta, the leader of the opposition Social Democracy Party said he would ask Basescu to call early elections.
Boc, meanwhile, defended his record.
"I know that I made difficult decisions, but the fruits have begun to appear," he said in a statement. "In times of crisis, the government is not in a popularity contest, but is saving the country."