Romania Forced To Contract New Loan In 2011 Unless It Cuts Wages, Pensions – President

Basescu stressed that one of the targets included in the program agreed upon between the Romanian Government and the International Monetary Fund consists in reducing state budget expenditures. He also pointed out that 35% of the state budget goes into public salaries and pensions.

„Romania would be forced to contract a new loan in 2011 if it did not reduce salaries and pensions”, said Basescu, adding that in 2010 alone, Romania must pay over EUR1.8 billion in interests attached to loans contracted over the past years.

Basescu also said it would be totally unfair to blame the IMF for this program, since it was drafted by the Romanian Government.

„IMF will not be held responsibleif the population is disgruntled and the program fails, but the state institutions, starting with the head of state and the government”, said Basescu.

„The Government’s main target was to keep taxes unchanged, namely, the value added tax and the flat tax rate, and a 20% cut in public sector salaries and pensions was also among the Government’s targets”, Basescu pointed out.

Basescu highlighted that Romania will come out of the crisis if the program agreed upon with the IMF is applied.