Romania’s Govt Coalition Discusses Letter Of Intent To IMF

Prime Minister Emil Boc on Tuesday evening met with the finance, economy, labor and agriculture ministers to discuss the letter to the IMF and the Government’s draft law slashing public spending.

President Traian Basescu, who had a meeting with the governing coalition’s lawmakers Tuesday, said the letter of intent to the IMF will not see any dramatic changes, adding Romania doesn’t plan to raise its main taxes.

Recession-hit Romania, which is relying on a EUR20 billion rescue loan from the IMF, EU and the World Bank, has pledged to take drastic measures to cut public spending and bring the budget deficit to below 6.8% of the GDP from 7.3% last year.

The measures include a 25% cut in public sector wages and a 15% cut in pensions and social welfare benefits, which prompted thousands of people to stage the biggest demonstration rally of the past 19 years outside the government building last week, hoping to pressure authorities into watering down their austerity plan.

Unions have promised to go on full-blown strike as of May 31, freezing public road and rail transport across the country, halting activity in schools, hospitals and public institutions.

The Government, which has been threatened with a no-confidence motion by opposition lawmakers, plans to adopt its austerity plan by seeking a confidence vote in Parliament.

The prime minister said Tuesday that the measures will take the form of a draft law, not an emergency ordinance, but didn’t say when the Government would seek a confidence vote to adopt it. Environment Minister Laszlo Borbely, on the other hand, told a news conference Tuesday, the Government will seek a confidence vote on Thursday.