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Romania’s Letter Of Intent To IMF Includes No Figures Regarding Layoffs

Romanian Prime Minister Emil Boc said Monday, that the letter of intent addressed to the International Monetary Fund (IMF) makes no reference to any number of layoffs and such measures will not be arbitrary but will depend on cost analyses made by the government.
Romania's Letter Of Intent To IMF Includes No Figures Regarding Layoffs
10 aug. 2009, 15:48, English

“No number of layoffs is stated anywhere in the letter of intent. This is not a number that can be imposed arbitrarily. (…) These analyses will be made based on cost standards,” Boc said when asked whether the government is negotiating with the IMF the layoff of 150,000 state employees.

Boc added that any reform made in administration will take into account efficiency standards and that the government will commit making serious cost analyses that will result in lower budget spending, Boc added.

“Ministers will present their own view on the reorganization, closing and merger of agencies, offices, inspectorates and all other structures subordinated to the government,” said the prime minister.

Government sources told MEDIAFAX Saturday afternoon the International Monetary Fund and the Romanian government were negotiating the layoff of 100,000 to 150,000 state employees by mid-next year, the freezing of public sector wages and the freezing of pensions, except for minimum and social pensions, this year and the next, until the future law regulating wages across the public sector produces effects.

Romania agreed with the IMF a EUR12.95 billion stand-by loan, as part of a EUR19.95 billion financial rescue package that also includes funds from the European Commission and other international institutions.

The first tranche, worth EUR5 billion, was released in May and entered the central bank’s reserve.

Romanian authorities and the International Monetary Fund have agreed on a budget deficit below 6% of the gross domestic product in 2010, from a 7.2% cap allowed this year, people familiar with the talks said Monday.

“The deficit drop below 6% of the GDP is subject to a 2.5% decrease of the structural deficit, through limiting expenditures which are not connected to the economic cycles, namely through structural reforms. This includes public layoffs, but the additional letter of intent does not specify any particular figure,” the mentioned sources said.