BUCHAREST (Reuters) - Romanian President Traian Basescu re-appointed leftist Victor Ponta as prime minister on Monday, giving his rival a mandate to conclude a new deal with the International Monetary Fund (IMF) to reassure investors.
The announcement eases concerns over Romania's political stability but the two men, who have fallen out in the past, are uncomfortable working together and it is unclear how long the partnership will last.
The European Union criticized Ponta, a 40-year-old lawyer, for undermining the rule of law in a failed attempt to impeach Basescu in July. The dispute delayed policymaking in the EU's second-poorest state and sent its currency to a record low.
After Basescu, a blunt former sea captain, was returned to office due to an invalid referendum, he said he would never again appoint Ponta as prime minister.
That had left doubts over the nomination, even though Ponta's Social Liberal Union (USL) won a clear majority in a December 9 parliamentary election.
It also raised doubts about how quickly Romania could seal a new IMF deal to replace a 5-billion-euro ($6.55-billion)agreement that expires early next year.
"Due to the fact that there was only one proposal by the political parties ... President Traian Basescu designated Mr Victor Ponta as candidate for the prime minister position," the presidency said in a statement.
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(Reporting by Sam Cage; Editing by Michael Roddy)