Romanian Fin Min Mulls Solidarity Tax For State-Run Cos Amid Public Sector Wage Cuts

Vladescu said the government is considering the introduction of a solidarity tax for employees in state-run companies, adding these employees' wages would not be slashed by 25%, as planned for the entire public sector.

The minister said the income cap has yet to be set.

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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