Romania To Merge Financial Guard With Customs Authority To Cut Costs

Citing budget constraints, he said the number of local fiscal administration offices will also be lowered, which entails layoffs and relocation of staff. He didn’t say how many people would be fired.

Blejnar said Romania’s tax administration reform would be achieved by the end of the year.

Romania’s President Traian Basescu said Thursday, after talks with the International Monetary Fund, that public sector wages would be cut by 25% and pensions and unemployment aid would also see a 15% cut, as the country is striving to stay afloat and avoid raising its main taxes.

The cuts take effect on June 1, Basescu said.

Romania will also lay off over 140,000 of its roughly 1.4 million public sector employees by early 2011, to maintain staff spending at the level agreed upon with the IMF, sources close to the negotiations told MEDIAFAX.

Romania’s recession-hit economy contracted by 7.1% last year, after three years of annual growth of nearly 8% and the eastern European country must narrow this year’s budget gap to 5.9% from 7.2% last year, to meet the terms of a EUR20 billion IMF-led bailout loan.

An IMF mission is currently in Romania to decide whether to disburse a fifth installment of EUR850 million of a total stand-by loan of EUR13 billion.