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Romanian President Traian Basescu on Monday named incumbent Prime Minister Victor Ponta - the nominee of the winner of December 9's election, the Social Liberal Union (USL) - to form the new government, avoiding what would've been another huge bout of political instability if he had done otherwise.

Basescu made the designation after his simultaneous consultations two hours earlier with the representatives of the parties that gained parliamentary seats in the general elections on December 9. "Victor Ponta has been designated Prime Minister of the Government of Romania by President Traian Basescu, by a presidential decree on Monday," the Presidential Administration announced in a statement.

Ponta's USL - a ruling coalition composed of left and right with the Social Democratic Party, the National Liberal Party and the Conservative Party - won a sweeping victory in the elections, with three times more votes than its main opponents, the pro-presidential Right Romania Alliance.

That should've made it a no-brainer for the president, who under the constitution gets to appoint the prime minister, to reappoint Ponta and ask him to form a cabinet. But the inveterate schemer Basescu had said he didn't want to choose the man who tried but failed to impeach him over the summer, comparing reappointing the incumbent to swallowing a pig. Instead, Basescu was reported to be looking to divide the USL by appointing another from among its members.

But by bowing to the inevitable, Basescu's move has mollified investors, who were unnerved that had he tried to engineer a split in the USL, it would've prompted the USL to try to impeach him again. Ponta reiterated that the USL alliance is "united, lucid and cohesive" despite its different ideologies and would focus on trying to negotiate a new IMF stand-by deal, seen as essential to shoring up the economy's stretched finances.

Ponta hailed the move by Basescu as in the best interests of the country. "I am the appointed prime minister and I will hold talks to all the political parties in Romania and those who are not included in the Parliament," he told newswires, stressing that the "USL won the elections, USL has the right to form the government ... but USL will not rule to oppress others, they will rule opposite of how the ruling had been. USL will rule for solidarity, reunification and reconstruction of Romania."

According to the country's constitution, Ponta has to form a government within 10 days of being named premier, and win a vote of confidence in parliament.

Ponta announced in a broadcast of private news channel Romania TV late on Monday that the final form and members of the new government will be known on Wednesday, at noon local time after the meetings of the leaderships of the parties making up the USL.