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Polling stations have opened in Romania in the country’s parliamentary elections.

Opinion polls suggest a large win for the governing coalition led by Prime Minister Victor Ponta and Senate President Crin Antonescu.

But the result could trigger renewed political instability as Romania negotiates a vital loan agreement with the International Monetary Fund (IMF).

Victor Ponta and so called centre-right President Traian Basescu have been bitter enemies since Ponta’s government tried to impeach the president last July.

Analysts say that, in the event of Victor Ponta’s Social Liberal Union (USL) winning, the president may ask someone other than Ponta to form a government.

President Traian Basescu has said clearly he will use his powers to appoint a prime minister “in the national interest”.

Given the enmity the president feels towards Victor Ponta and his coalition, it is hard to imagine he has the leader of the Social Liberal Union (USL) in mind.

However, any attempt to appoint someone else may result in a constitutional crisis.

If the USL wins a clear majority, analysts say the president may ask someone other than Victor Ponta from within USL to become prime minister, using the argument that the USL is not a party but a coalition.

Opinion polls in Romania suggest a large win for the governing coalition led by Prime Minister Victor Ponta

Opinion polls in Romania suggest a large win for the governing coalition led by Prime Minister Victor Ponta

If the USL falls short of a majority, Traian Basescu could ask one of his allies in the Right Romania Alliance (ARD) to try to form a coalition.

Opinion polls have put the ARD in second place, but far away vs. USL.

Any prolonged political instability could unnerve markets and threaten a crucial IMF loan agreement.

Romania’s current loan agreement expires in early 2013.

President Traian Basescu barely survived July’s referendum on his impeachment after turnout fell below the 50% needed to validate the vote, even if 7.4 million people were against him.

He said Romanians had “rejected a coup” by staying away from polling stations.

The row between the two men has alarmed Romania’s EU partners and parlayzed political decision-making.

Romania and neighboring Bulgaria joined the EU in 2007, but Brussels has put both countries under special monitoring because of concerns about judicial independence, corruption and political influence in state institutions.

Romanian Prime Minister Emil Boc has resigned today in order to “defuse political and social tension” after more than three weeks of protests against austerity measures.

Speaking after a cabinet meeting, PM Emil Boc said he had given up the government’s mandate as “it is the moment for important political decisions”.

Although Romania’s economy grew last year, the government has been hit by three weeks of demonstrations.

Emil Boc government has imposed a 25% cut in public sector wages and a freeze on pensions.

Sales tax was also increased to 24%, in a country seen as Europe’s second poorest.

Romania needs to implement the measures to qualify for the next installment of 20 billion Euros ($25 billion) bailout loan from the International Monetary Fund (IMF).

Romanian Prime Minister Emil Boc has resigned today in order to "defuse political and social tension" after more than three weeks of protests against austerity measures

Romanian Prime Minister Emil Boc has resigned today in order to "defuse political and social tension" after more than three weeks of protests against austerity measures

In a statement, Emil Boc, 45, said that in a time of crisis, his centrist government had not taken part in a popularity contest but had acted to save the country.

“I know that I made difficult decisions, but the fruits have begun to appear,” PM Emil Boc said.

Elections in Romania are scheduled to take place in November and there is speculation that President Traian Basescu may seek to appoint a technocrat-led government until the vote.

Protests broke out last month, initially against the resignation of popular junior health minister Raed Arafat, but soon became an expression of discontent against austerity and corruption.

The left-wing opposition USL alliance, headed by Victor Ponta and Crin Antonescu, leaders of Social Democrat Party and Liberal Party, is currently leading the opinion polls. Victor Ponta suggested last week that Romania should either have early elections similar to Spain, or temporarily install a technocrat administration, like Italy.