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Austerity claims another government

A backlash seems to be gathering apace against austerity after the Romanian government lost a vote of no confidence earlier today causing its Prime Minister Mihai Razvan Ungureanu to resign.

The government lost the vote after 235 lawmakers voted against the government’s austerity measures. Increasing violent public protests and accusations of corruption and cronyism led to the vote being called by opposition parties.It makes it the second Romanian government to fall since February.

Opposition leader Victor Ponta said the vote represented the end “of an abusive system that uses any weapon possible.”
“Sometimes there is justice. Today there was justice,” he declared.

The news means that Romania is the second European government to collapse in the space of a week, after Holland’s government was forced to resign over disagreements about the nation’s austerity measures. It makes Romania the tenth government to fall in the space of two years alongside the governments of Greece, Italy, Spain, Portugal, Latvia, Slovakia, Slovenia, Finland, and the Netherlands.

The austerity measures imposed on the European countries by the IMF and European central bank continue to claim political victims, raising questions as to how long the measures can remain in force. Many financial experts have recently emerged saying that the austerity measures are stifling growth; a key requisite for countries to climb their way out of recession.

In France, President Nicolas Sarkozy is set to lose the upcoming French elections to anti austerity candidate Francois Hollande, if Sarkozy does lose then the German chancellor Angela Merkel will become more isolated on her calls for the continuation of the austerity measures.

After the news broke, The Romanian currency the leu dropped to an all time low in the markets.

The Pound to Euro exchange rate is currently trading at 1.225

The Pound to US Dollar exchange rate is currently trading at 1.625

The Euro to US Dollar exchange rate is currently trading at 1.325