Romania’s Letter Of Intent To IMF To Be Adopted Only With Prior Ok Of Economic And Social Council

Basescu stressed he would be glad if the Council came up with better solutions than the ones proposed by the Government in the letter of intent to the agreement sealed with the IMF. He argued, however, that the IMF is not at all the Salvation Army and therefore, offers no gifts whatsoever.

Basescu also said that reducing public spending is the best solution for Romania at the moment, arguing it is based on economic indicators. He went on saying it is necessary to carry on such measures by reducing tax evasion and levying more taxes.

The head of state pointed out that he felt compelled to clarify these aspects because many of the people who failed to partake in the discussions held Tuesday with the representatives of political parties and the unionists, rushed to make all kinds of statements.

Cartel Alfa union leader, Bogdan Hossu, said Tuesday that Basescu called on the Government to resume negotiations with the IMF experts if the country’s Economic and Social Council does not approve the changes agreed upon between the Romanian authorities and international institutions.

Asked whether the Memorandum of Understanding between Romania and the IMF can be modified, Basescu said „negotiations can be resumed anytime.”

Joint teams from the IMF, the European Commission and the World Bank visited Romania between April 27 and May 10 for the fourth review of the country’s performance under the loan agreement.

At the end of the mission, Romanian authorities announced a series of austerity measures aimed at lowering the budget deficit and ailing the economy, including a 25% cut in public wages.

Romania and the IMF have agreed to a budget deficit of 6.8% of the gross domestic product in 2010, from an initial target of 5.9% of GDP.

In addition, the government promised to cut the number of public employees by 70,000 this year, to 1.29 million and pledged to „aggressively” revive the privatization program.