Romania's minority government survived a no-confidence vote in parliament today, prolonging political deadlock that has all but blocked reforms in the new European Union nation.
The vote means Prime Minister Calin Tariceanu's cabinet remains dependent on the support of opposition parties to push laws through parliament where it commands 20 per cent of seats.
Analysts say this could threaten Romania's fiscal prudence ahead of a national election next year.
But Mr Tariceanu remained defiant, saying he would rather step down than compromise.
"We are not ready to make any compromise to cling to power. We can serve Romania from the opposition," he told a news briefing after the vote.
Without faster reforms, Romania could face sanctions from the EU which is monitoring progress particularly in the fight against rampant corruption.
Economists warn that without sufficient fiscal prudence and effective absorption of EU aid, Bucharest runs the risk of sparking a financial crisis if it runs out of foreign cash to fund domestic investment.
The failure of the parliamentary motion represents a defeat for the opposition Social Democrat Party (PSD), which proposed it.
It reveals deep rifts within the powerful leftist group struggling with weak public backing. Polls put its support at half the level it won in the 2004 elections.