December 30, 2016 / 8:20 AM / 7 months ago

Romania's Grindeanu named PM-designate, to quickly form cabinet

Sorin Grindeanu (C) gestures while answering a question during a press conference held alongside Romania's Social Democrat party (PSD) leader, Liviu Dragnea (R), in Bucharest, Romania December 28, 2016. Inquam Photos/Octav Ganea/via REUTERS

BUCHAREST (Reuters) - Romania's president accepted Sorin Grindeanu for the post of prime minister on Friday after rejecting the Social Democrat Party's (PSD) previous nominee, clearing the way for a new leftist government to be formed next week.

Grindeanu, 43, a mathematician and former deputy mayor of the city of Timisoara, will seek a vote of confidence on Jan. 4 in parliament, where the PSD and a junior ally have a majority.

The PSD returns to power after being ousted just over a year ago when a deadly fire in a Bucharest nightclub brought public anger and protests over corruption and public administration failings.

Run by an official convicted of electoral fraud, which he denies, the PSD appears to have won the support of many Romanians with promises of increased social spending and economic security.

But its rule will be closely watched by Romania's European Union partners because the PSD is considered to be soft on corruption and budgetary prudence.

"I got an SMS in the morning ... I didn't have this number. It only said: 'Good luck! - Klaus Iohannis'," Grindeanu told reporters about his presidential endorsement.

PSD leader Liviu Dragnea told reporters on Friday a new cabinet should become fully functioning on Wednesday: "We've reached the final stretch so that our governing programme can be enforced the way we designed it," Dragnea said.

The PSD's first pick to lead the cabinet was Sevil Shhaideh, a close associate of Dragnea, whose conviction in a 2012 vote-rigging case ruled him out of the job.

Iohannis rejected the nomination of Shhaideh, a 52-year-old woman from Romania's 65,000-strong Muslim community, without giving a reason.

"The (PSD) are about to rule in a very comfortable governing formula, with solid support in parliament, having a young but experienced politician from the PSD's new generation," said political commentator Cristian Patrasconiu.

"A new budget will surely go as they plan, sometime in January."

Some economists warn the PSD is likely to burst the EU's budget ceiling of three percent of GDP next year.

A cut in value-added tax and a big hike in the minimum wage and state pensions are scheduled for next year, fulfilling PSD campaign promises.

A 15 percent wage increase for health and education workers has also been approved by parliament, while the PSD also wants to hike other welfare spending.

Editing by Janet Lawrence

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