ING: Romania Should Cut 200,000 Public Jobs By 2012 To Lower Budget Gap

„It’s hard to give an exact figure, but it would take massive layoffs to bring down the budget deficit to below 3% of GDP by 2012, namely around 200,000 people,” ING Bank’s chief economist Nicolae Chidesciuc told MEDIAFAX.

He said the layoffs would ease the social expenses’ burden on the budget.

The European Commission launched the excessive deficit procedure against Romania in May last year. However, the ECOFIN council agreed to extend by one year until 2012 the deadline by which the recession-hit country must lower its budget gap to below 3% of GDP.

Romania and the International Monetary Fund agreed on a budget deficit target of 6.8% of GDP this year, from a gap of 7.4% of GDP registered in 2009.

For 2011, the budget deficit target was set at 4.4% of GDP.