At the Defence Ministry sum-up meeting last Friday, President Traian Basescu said spending on ‘some fabricated bonuses’ and ‘all sort of special benefits’, Romania runs the risk of taking out yet another loan late this year to cope with the crisis, Mediafax reports. ‘Let’s suppose Government would not be able to impose reasonable spending also including expenditures related to invented bonuses and all kind of special advantages so on and so forth. The consequence would be, at the end of 2010, we should borrow again in order to pay for all those unjustified incentives. We went way too far with this joy of spending without responsibly asking ourselves with what funding, the president said, who added: ‘We will have to tailor the demands to fit Romania’s realities and we will have to understand once and for all we cannot spend more than we produce. (…) In this respect, I take advantage of this meeting here to publicly say I will be this government’s upholder in bringing spending in line with the operability needs of the state. We cannot make borrowing yet more money for 2011-2012 into a beaten track, since what we’d sacrifice is even Romania’s development,’ the head of state also said.

Valeriu Turcan, spokesman for Romania’s president told ‘Gandul’ daily that the president does not advocate the need for a fresh loan. ‘The president has not pleaded for a new loan. (…) The head of state said he supports government’s intention to bring spending in line with the operability needs of the state,’ Turcan said.

Emil Boc’s reaction was government has done everything it took to eliminate abuses, and all the factors involved should comply with that. ‘Unless we root abuses out, such as the smile bonus and the beautiful-eyes bonus, we won’t have enough money for what we really need. What President Basescu said is common sense, as he brought an extra argument for wise spending,’ the Boc said.

PM’s adviser, Andreea Paul: ‘This is a purely hypothetical case’

Andreea Paul (Vass), an adviser to premier Emil Boc, thinks the president referred to a hypothetical case only, a scenario that might happen unless the reform measures of the Boc Government are applied. ‘A new loan is out of question. Definitely so,’ she told the same newspaper.

adrian vasilescu: central bank not involved

Adrian Vasilescu, adviser to the governor of the National Bank of Romania, holds the statement as a ‘hypothesis’, adding the president did not speak of an IMF loan. ‘No latter than a few days ago, the Finance Ministry spoke of a new loan likely to be borrowed from the capital market. Maybe, it is there you should ask for more details, since we are not involved,’ Vasilescu said ..

Reacting to President’s statement, Mihai Tanasescu, Romania’s represantive at the International Monetary Fund (IMF), said the president’s message was that ‘we cannot spend more than we produce. ‘I believe what the president meant was, there are distortions salary-wise in the budgetary sector and the central and local administration,’ he outlined.

Daianu: There’s a need for loans throughout the year

Economy Professor Daniel Daianu told ‘Gandul’ our country needs credits throughout the year, not just at the end of it. Asked under what terms Romania could take out yet another IMF loan, he said Romania could refinance its debt or borrow from other sources, such as an euro bond issue on the foreign market in order to return the IMF loan. ‘For now, the IMF money are the most inexpensive to which we have access to, save for those from the EC,’ Daianu said, given the annual interest of 3.5% on the loan, from at least 4.5% - 5% if borrowed from foreign market sources.

PC leader: Basescu’s announcement, a slap in Boc Government’s face

Conservative Party (PC) President Daniel Constantin sees the announcement by the head of state of a potential loan Romania might borrow this year as ‘a slap in the face of the Boc Government and of the disaster it has been producing in the economy,’ Mediafax reports. He also said the announcement is part of the ‘host of the tests thrown on the market’ by incumbent ministers as well over the scrapping of child allocations or taxing pensions. ‘The president’s signal proves that, despite promises made by the finance minister, Romanian economy does not bounce back, but is going into collapse by the day,’ the Conservative leader stated.

10,300 layoffs green-lighted in railway sector

Government approved the list of companies to operate upcoming layoffs, with 10,301 employees going to be sent home. Their bulk comes from CFR merchandise transport (6,700), followed by CFR population transport, 1,100, and the servicing division “CFR IRV” (800). At the opposite end of the scale, the nursery company SC Sere si Pepiniere’, (15).

Teachers threaten with protests

National Education Federation (FEN) decided to launch initial protests meant to go as far as the general strike. The teachers are discontent with revenues’ decrease further to enforcement of the unique law, the failure to grant some bonuses, and the layoffs in Education as of September 1, Mediafax informs.

Moreover, FEN unionists demand the canceling, through OUG 1/2010, of the constitutional right to collective negotiation of salaries and bonuses in the public sector, the refusal to enforce the judicial rulings, through which salary rights, blocked through memorandums of the Ministry of Education, Research, Youth and Sports, were obtained in court, and the unjustified merging of educational units, concurrently with the growth of the number of pupils in the classrooms, and the undervaluation of the standard costs per pupil. The decision was made on Friday, at the Extraordinary Congress of the National Education Federation.

The situation does not look better in Education either, where unionists contemplate suspending classes in a few schools in the country, as teachers did not receive February salaries, Antena3.ro writes.

Cutting budget deficit to 3 pc in 2012, a tall task

Cutting the budget deficit down to under 3 per cent by 2012 will be a difficult task, if return to economic growth will only be temporary and economic performance will be significantly lower than the basic script in the convergence draft plan for 2009-2012, a document drawn out in February of this year. ‘Economic growth in the basic script relies on increased exports rather than the dynamic of domestic demand, a reversal of the growth pattern in latter years,’ the draft shows. The basic projection for 2011 stipulates an economic growth of 2.4 per cent, and the risk-scenario confines it to 1.4 per cent.