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Romania Moves To Plan B After Court Rejects Austerity Measures – PM

Romania has prepared an alternate plan to lower the budget deficit and keep a EUR20 billion IMF-led foreign loan package on track, Prime Minister Emil Boc said Friday after the Constitutional Court fended off a 15% cut in pensions.
Romania Moves To Plan B After Court Rejects Austerity Measures - PM
25 iun. 2010, 15:10, English

Boc said the government is discussing the measures with the IMF and the European Commission, but declined to comment whether the new steps include tax increases.

The government recently sought a confidence vote in Parliament for a law package including a 25% cut in public salaries and 15% reductions in pensions and unemployment benefits.

The Constitutional Court Friday ruled the pension cuts were unconstitutional and sent the law back to Parliament for revision. Other austerity measures in the law package were deemed as „disputable”, but the court didn’t see fit they should be reexamined in Parliament.

All the other measures, including the pay cut for state employees, are still standing and will be applied once they are published in the Official Journal, Boc told a news conference.

People familiar with the matter told MEDIAFAX earlier today that the government is considering increasing the value added tax level to 24% from 19% and the flat tax rate to 20%-22% from 16%.