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Romania CDS Higher After Court Ruling On Austerity Measures

Credit default swaps (CDS) to insure Romanian sovereign debt against default inched higher Friday, after the country’s Constitutional Court rejected part of the austerity measures proposed by the government to slash spending.
Romania CDS Higher After Court Ruling On Austerity Measures
25 iun. 2010, 15:36, English

Romanian five-year CDS traded Friday at 378 basis points, from 371 bps Thursday, while the three-year CDS rose to 360 bps from 352 bps a day earlier.

The government recently assumed responsibility for a law package including a 25% cut in public salaries and 15% reductions in pensions and unemployment benefits.

However, the Court 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.