Romanian Parliament To Set State Budget Adoption Calendar Tuesday

David added the draft law, which the Government submitted on December 24, has entered regular Parliament approval procedure.

The Government approved on December 23 the draft 2010 state budget, which should be adopted by mid-January to unblock new disbursements from a EUR20 billion multilateral loan package that were halted over political turmoil following the collapse of the country's government in October. The draft budget was submitted to Parliament the next day, for emergency debates and approval.

The country's draft budget considers economic growth of 1.3% of GDP and an inflation rate of 3.7%. In 2009, Romanian economy is estimated to contract by around 7%, while the annual inflation is predicted at 4.5% end-December.

"Romania will be a functioning state in 2010, with a stable, slightly growing economy and will be able to restart its economy in 2011 (…). I am confident that sometime during 2010 we will be able to make positive corrections, particularly regarding investment and development programs," said Finance Minister Sebastian Vladescu.

Next year's draft budget includes a series of austere, most unpopular measures in the public sector, such as slashing up to 100,000 staff and freezing wages and pensions, in a move to bring down the budget deficit to 5.9% of the gross domestic product, from 7.3% of GDP estimated for 2009.

The bill, however, maintains the flat tax on income unchanged at 16% and the value added tax at 19%, as well as the tax exemption on reinvested earnings.

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