Romania Needs More Data Before Cutting Social Security Taxes - IMF

Romania and the International Monetary Fund have agreed to wait for additional fiscal data before deciding on a potential cut in social security contributions, IMF mission head Jeffrey Franks said Monday.

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"We've agreed with the government that we need to see more data on the fiscal situation that would indicate there is enough room to lower the social security contributions. The key is to make sure you have enough money both in 2011 and in 2012 to take such measures," Franks told a news conference in Bucharest.

Romanian government is considering cutting the general social security contributions to 41% from 44% presently by reducing the taxes paid by employers.

The authorities also announced a possible raise in public paychecks to 2010 levels, when the government decided to cut salaries by 25% as part of an austerity plan.

"It's too early to speculate on the scope provided by next year's budget for salary increases, but I believe things are moving to the right direction," Franks said.

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