Romania Scraps 13th Salary For Public Workers Amid Spending Cuts

Romania will not pay public sector employees a 13th monthly salary this year and the measure will be included in next year’s state budget, according to the Memorandum of Understanding between Romania and the IMF and EU.

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The country must take this measure and implement its 2010 budget in order to receive a fourth disbursement of a EUR5 billion loan from the EU, scheduled for the fourth quarter of this year, part of a larger IMF-led loan of nearly EUR20 billion.

Romania has pledged to drastically cut public spending and keep the budget deficit at 7% of GDP under European accounting standards.

So far, the recession-hit country 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.

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