August 12, 2015 / 4:33 PM / 2 years ago

Party to stand by Romanian PM despite corruption case: sources

* Corruption cases embarrass coalition government

* PM Ponta may face new round of graft hearings next week

* Tax-cutting plan could boost Ponta's popularity

By Radu-Sorin Marinas

BUCHAREST, Aug 12 (Reuters) - Romania's ruling coalition will stand by Prime Minister Victor Ponta even if a criminal investigation leads to him being indicted on money-laundering and forgery charges, senior allies said on Wednesday.

Ponta's political future has been clouded by his surprise loss to rival Klaus Iohannis in last November's presidential election and a string of corruption cases brought against himself, his finance minister and other close allies.

The prime minister, who denies any wrongdoing, has withstood intense pressure from the opposition and from Iohannis to step down. But there is no obvious alternative from within his own ranks to take charge.

"We cannot afford to lose Victor Ponta. Our first choice has been Ponta. Our second choice is Ponta," said a senior member of the ruling Social Democrat (PSD) party.

An indictment "may eventually reflect only an error by a prosecutor ... it doesn't mean that a person is guilty," said another coalition official.

"There's no other feasible choice than Ponta for prime minister. He's been very good manager so far and we and all of his partners will back him further."

Ponta's centre-left coalition includes his PSD, the National Union for the Progress of Romania (UNPR) and the smaller Liberals and Democrats' Alliance. He quit as head of the PSD on July 12, one day before being charged with forgery and being an accessory to tax evasion and money laundering.

He was succeeded by interim party leader Liviu Dragnea, who himself has been given a one-year suspended sentence for trying to rig a referendum in 2012. An appeal is due in September.

Despite that, sources say Dragnea's appointment will be made permanent at a party congress in November. A general election is due in late 2016.

The prime minister could limit the fallout from the corruption case if he can push through sweeping tax cuts that would play well with voters. The central bank and the International Monetary Fund have criticised the planned cuts.

Parliament is due to vote on the programme in late August.

If Ponta does lose support, President Iohannis could choose a successor from the opposition Liberal party he used to lead.

New hearings into Ponta's case could begin next week, a source at Romania's anti-corruption agency told Reuters. But they may have little effect on his political future.

"Let's make it clear: indicted or not, as long as he remains prime minister, we will back him," said a senior official from the UNPR party in coalition with Ponta. (Editing by Matthias Williams and Tom Heneghan)

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