Romania Govt Approves Letter Of Intent To IMF Deal

The authorities in Bucharest pledged to lay off 74,000 public staff by yearend on top of the 27,000 employees who already lost their jobs so far, according to the letter, which was obtained by MEDIAFAX early August.

Additional measures aimed at cutting public spending include keeping a salary freeze through 2011 and eliminating vacation bonuses and heating subsidies.

The government also committed to revise the Labor Code and several related laws and to increase the tariffs charged by some of the largest loss-making state companies.

In addition, the executive said will issue an ordinance to tax high-income individuals and broaden the definition criteria for taxable income, so that all income not legally exempted would be taxed.

Romania and the IMF last year signed a EUR13 billion loan agreement, part of a larger EUR20 billion aid package that includes funds from the EU and other international lenders.