Romanian Govt To Approve Draft 2011 State Budget Monday - Sources

According to sources, the draft budget will be sent to the Parliament immediately after approval.

Government spokeswoman Ioana Muntean said later Thursday that the Executive will approve the draft state budget and the draft social security budget for 2011 in a meeting next week. She also said the Government will hold talks in the next weeks' meeting on the propositions put forward by the Labor Ministry regarding maternity leave and child-rearing benefits.

The ruling coalition convened at the Government Thursday for debates on additional maternity leave propositions, after Labor Minister Ioan Botis suggested that maternity leave should be reduced from two years to one year.

The 2011 draft budget states that Romanian institutions managing funds, except the Labor, Agriculture, Environment, Finance, Development and Transport ministries, will receive less money from the state budget next year, both compared to the budget projection for 2010 and the 2010 initial budget, which was revised twice.

Public system pensions, including minimum guaranteed pensions, will be frozen at they current level in 2011, and social security contributions will not decrease below the level set for this year, reads the draft act.

The Government will cut funds from VAT collections to be granted to local budgets and will halve the money allotted for infrastructure works and sport grounds. It will also reduce local education salary funds and social benefit funds to 8.8 billion lei (EUR1=RON4.2923) next year, from RON11.5 billion in 2010.

According to the 2011 draft budget, the value of loans employers who create new jobs may take out was also slashed to RON10 million in 2011, from RON20.6 million in 2010.

Local authorities will be forbidden from financing new investment projects if they do not provide funds to complete projects that have already been started, according to the draft budget.

State-run companies and autonomous departments are compelled to freeze hiring next year so they do not exceed the number of employees allowed for 2010. State-owned companies that report losses or receive subsidies from the state budget are compelled to limit salary expenses to this year's level.

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