Romania Restricts Investments In 2010, Carries On Only Few Projects - PM

Prime Minister Emil Boc said Romania will restrict investments in 2010, due to budget constraints, and will build only 4,000 homes, via the national housing agency ANL, 500 kilometers of county roads, out of 10,000 km, and maximum 1,000 homes, of a total 25,000, for specialists in rural areas.

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Boc also said Sunday, at the end of a meeting with IMF experts, that the government will also pay debts of nearly EUR1 billion to companies, including in the healthcare sector.

"These spending cut measures will allow the state to pay its debts to companies. The state will pay debts of nearly EUR1 billion, including in the healthcare sector, in order to eliminate any potential economic deadlock in the second quarter, and possibly the third quarter," said Boc.

He added the government will continue to finance public investments if this program of measures is applied.

According to Boc, the government will unfold a program of investments, as of May 15, that will be financially backed from European Union and state budget funds. He stressed the program targets to support small and medium enterprises and infrastructure projects in rural areas. Boc added the government will also unfold a program for environment infrastructure worth EUR700 million, which will also be backed from European Union and state budget funds.

Romanian President Traian Basescu said Thursday, after talks with International Monetary Fund officials, that pensions will decrease by 15% and salary funds in the public sector by 25%, which will also impact the minimum wage, adding subsidies will be drastically reduced.

Basescu said Romania is forced to drastically cut public spending to avoid raising its main taxes and called on unions to assume their part of the responsibility for the allotting of funds in public institutions.

The IMF mission is in Romania to decide whether to disburse a fifth installment worth EUR850 million of a total stand-by loan of EUR13 billion. In a statement released Friday, the IMF said Romania's austerity plan to cut public salaries and pensions by 25% and 15% respectively was developed by the authorities in Bucharest and was not proposed by the Fund.

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