EXCLUSIVE: Romania To Continue Spending Cut Policies In 2012, Amend Heating Aid Legislation

By amending the legislation providing heating subsidies, the state budget will save a significant amount of money, according to the Government’s letter of intent to the IMF, obtained by MEDIAFAX.

„By end-July, we will improve the legislation to provide heating allowances to target the most vulnerable members of society, while generating significant savings for the budget,” reads the document.

According to the letter of intent, the Government aims to bring the budget deficit down to 3% of the gross domestic product next year, which entails continuing spending cut policies, including on wages and bonuses.

The Government also pledged to limit „ad hoc” changes to the tax system to insure predictability and stability in the business sector, a commitment also made in the Executive’s previous letters of intent with the Fund.

A joint mission of the IMF, EU and World Bank were in Romania between January 25 and February 8 to review the country’s progress under a EUR20 billion IMF-led loan secured in spring 2009 and to discuss the terms of a follow-up precautionary deal.