5 pc cut in social security contributions starting October 1, PM Ponta announces

The social security contributions (CAS) will be cut by 5 percent starting October 1, PM Victor Ponta announced Thursday evening, after the meetings with the IMF, EC and WB mission. The budgetary effort involves RON 850 M, without increasing the budgetary deficit and also without increasing taxes, the premier said.

Ponta stressed that the decision is to be sent next week to the parliament through a document assumed by the executive.

The premier said the sources for supporting the budget deficit for 2014 are clear. The budget for 2015 is to include sources enough to cover the shortage of incomes to the budget.

It is unclear whether the stand-by agreement with the IMF is still standing. The PM denied the accord is stalled. On the other hand it is obvious that the fund did not agree with the CAS cuts without the government revealing the sources to support the increasing deficit.

Former finance minister Gheorghe Ialomitianu stated for digi24 TV that his party will support the decision, but the incumbent premier should have taken into consideration his democrat-liberal initiative in 2013 with the same target.

Most right-wing parties confirmed support for the decision, being nevertheless reluctant to the social-democrat decision, in terms of political involvement. They regard the measure as being a political one, in view of presidential elections this autumn.

Businessmen representatives also hailed the governmental decision.

PM Victor Ponta had talks with the IMF, the European Commission and the World Bank delegation yesterday. In an interview for Bloomberg, Ponta announced that the IMF evaluation has been postponed for November.

Yesterday evening, both the PM and FM Ioana Petrescu underscored the agreement with the EC, WB and IMF is still standing, is not going to be terminated, stopped or discontinued. “It is still functional, it is not going to be terminated, not to be denounced,” PM Ponta said.

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