Romania May Face Financial Crisis Without Reforming Public Spending - PM

The Government keeps its intention to cut and streamline public spending, as economic developments of the past two years show that, without reform, Romania might slide into a financial crisis like the one faced by Greece, Prime Minister Emil Boc said Thursday.

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Boc said the Executive is forced by the current economic situation to continue reforms, without cutting taxes.

Romanian President Traian Basescu on Tuesday warned the Government that economic indicators for the first months of 2010 suggest the budget deficit could exceed 7% of the gross domestic product, above the 5.9% of GDP target agreed with the International Monetary Fund.

Basescu said the 5% cut in personnel costs agreed with IMF might be insufficient to keep the budget deficit under control and asked for additional measures to trim spending, including elimination of all tax exemptions.

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