Opposition parties snubbed the president’s invitation to consultations. Unions still hope salary and pension cuts will be modified. IMF head in Romania reveals that the Fund’s recommendations were more balanced, but president and government insisted on cutting expenses exclusively.
Further to the consultations between unions and the president, the IMF agreement could not be adopted by government without CES’ opinion. If the document suffers any modifications, IMF team will need to return to Romania for further negotiations.
PNL made its own austerity proposals deemed to deal with the budget strain : 7 ministries, 30 agencies, budget and procurement cuts.
PSD leader Victor Ponta announced his party would present a comprehensive action plan today.
President Traian Basescu warned representatives of the ruling coalition to stop supporting their ‘political clientele’ and name people on key administration positions based on political criteria.
The letter of intent to the IMF spells out that the government will “aggressively” reactivate the privatisation programme, especially in domains such as industry, energy, transport, tourism and agriculture, and that the Economy Ministry will also initiate the sale of minority shares in several of its companies.
Government took commitments to cut the public sector employees down to 1.29 million by the start of 2011, which means the sacking of 70,000 employees or just above 5 per cent.
The IMF’s mission chief for Romania, Jeffrey Franks said yesterday the Fund has revised its economic forecast down from 0.8 percent of GDP to -0.5 percent for 2010, but growth will rebound in 2011. The IMF’s recommendation at the Romanian government’s austerity measures was more balanced between revenues and expenditures, he said.