UPDATE 1-Foreign investors sound alarm over erosion of Romania's business climate

Major foreign business chambers in Romania, including the U.S., UK and Germany, voiced concern on Wednesday about what they described as a fast deterioration of the investment climate and the credibility of central Europe's second-largest economy. Romania's politics have been in turmoil since hard-right presidential frontrunner George Simion's surge in a first-round vote led to the collapse of the pro-Western coalition government, and caused widespread concern about Romania's already strained finances.

With a decisive run-off due on Sunday and a poll showing Simion and centrist Bucharest mayor Nicusor Dan running neck-and-neck, the business chambers said political decisions must be stable and coherent to keep Romania on its Euro-Atlantic path. "The Romanian business sector represented by our organizations underlines jointly the accelerating deterioration of the business environment and the erosion of Romania's credibility," a joint statement by eight investors associations and business chambers said.

A Simion victory could isolate Romania, erode private investment and destabilise NATO's eastern flank, where Bucharest plays a key role in providing logistical support to Ukraine as it fights a three-year-old Russian invasion, political observers say. The head of the country's largest investors' group told Reuters last week that a deepening political crisis after the first round of Romania's presidential election raised the risk of pushing the country into

recession .

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