Romania No Longer Grants Treatment Vouchers Contracted Via Pension House In 2010 – Draft

The decree amends the law on 2010 social security budget and stipulates that the National Pension House will not contract spa treatment vouchers in 2010.

The existing state budget law only stipulates that the funds assigned to discount treatment vouchers cannot exceed 10% of total funds approved for expenditures on spa treatment vouchers.

The state budget provisions approved for 2010 also ensured the payment of spa treatment vouchers used and non-discounted in 2009.

Romanian President Traian Basescu said Sunday, after talks with union federation leaders, that social benefits for children and people with disabilities will not be reduced, adding all other subsidies are further poised to "analysis, reduction or elimination."

He added Monday that Romania's many subsidies and social benefits have rendered the country's budget into one of social aid.

Romania has decided to slash public sector wages by 25% and pensions and unemployment benefits by about 15% as of June, to meet conditions of an IMF-led bailout loan of nearly EUR20 billion.

So far, recession-hit Romania has received around EUR9.2 billion from the IMF and EUR2.5 billion from the EU.

Joint teams from the IMF, the EU and the World Bank were in Bucharest until May 10 for the fourth review of Romania's progress under the loan agreement.

The next two installments are worth EUR850 million each and are scheduled for release in June and September, respectively. IMF mission head Jeffrey Franks said Monday a delay in implementing planned fiscal measures in the public sector could prompt the Fund reschedule the release of a fifth loan installment to the country until the measures are in place.

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