Romania To Operate Massive Layoffs Until June 2010 - Fin Min

"I assure you that Romania will operate massive layoffs until June 2010, considering its commitment to cut spending by 0.6% of gross domestic product. I am not talking about 1,000-2,000 employees," said Pogea, when asked whether the Romanian and IMF officials agreed on the exact number of employees to be laid off.

Government sources said on August 8 that the measures discussed by the government and IMF officials also targeted the layoff of 100,000-150,000 state employees until the middle of next year.

Romania’s budget spending on wages in the public sector will be lowered by an annual 0.5% of GDP starting 2010, to end below 6% of GDP in the next four to five years, the International Monetary Fund said Monday.

Jeffrey Franks, head of the IMF mission to Romania, said during a press conference Monday that Romania’s spending on wages in the public sector have reached 9% of GDP from 7.5% of GDP and the IMF sees decreases of 0.5% of GDP per year in the next four to five years, until wage expenses reach less than 6% of GDP.

Romania and the IMF signed in May a EUR12.95 billion two-year standby arrangement, as part of a EUR19.95 billion financial support package that also includes funds from the European Commission, the World Bank, and the European Bank for Reconstruction and Development.

Romania has already received a first tranche of EUR5 billion from the IMF, while the next two installments, or EUR1.9 billion and EUR1.5 billion, are due for September and December, respectively.

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