BUCHAREST, Sept 2 (Reuters) - Romania's centrist ruling coalition faced possible collapse on Thursday as a junior party withdrew support for the prime minister in a row over the sacking of its justice minister, threatening economic recovery and prolonged instability.
The dismissal of Stelian Ion deepened rifts in the centrist coalition formed between Prime Minister Florin Citu's Liberals, the centrist USR-Plus and the ethnic Hungarian Party UDMR after the national election in December 2020.
While early elections are not expected, a rupture in the coalition that controls 56% of parliament could endanger the government's agenda to reduce budget and current account deficits and curb the pandemic, leaving it prone to concessions.
USR-Plus said on Thursday it had begun taking signatures for a no-confidence vote in parliament. To oust the cabinet, USR-Plus would need to work with the opposition Social Democrats, whose attempts while previously in power to dilute the rule of law were actively oppposed by the smaller centrist party.
"It is a necessary vote and can only be avoided if Florin Citu resigns or the coalition withdraws his support," USR-Plus said. The Liberal Party said it would stand by Citu and that USR-Plus would be damaged by associating with the opposition.
Ion's dismissal came after USR-Plus opposed a government decree to set up a 50 billion lei ($12 billion) regional infrastructure development financing scheme which would give local mayors access to funds with limited oversight.
Citu said the scheme was a means for the European Union's second poorest state to modernise dilapidated villages that lack roads, plumbing and utilities.
Similar regional funds were used by previous premiers to leverage mayoral support, crucial during general elections.
Citu, a relative newcomer but backed by centrist President Klaus Iohannis hopes to win the Liberal Party leadership in an internal election this month.
"The Liberals' insistence on the development fund is symptomatic of Romanian politics, where long-term interests are sacrificed for short-term positions," said Sergiu Miscoiu, a professor of political science at Babes-Bolyai University.
He said he expected Citu to push through with the approval of the regional development fund, even if it meant the Liberals ending up with a minority government.
Ion, whose dismissal could also hamper moves to appoint top prosecutors tasked with fighting organised crime and corruption, was the second USR-Plus minister Citu has ousted this year.
