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IMF Mission Head Confident Romania Will Apply Cut Measures

Both Romanian president Traian Basescu and Prime Minister Emil Boc look so determined to cut public spending, so Romania should manage to implement austerity measures, said Jeffrey Franks, head of the International Monetary Fund mission in Romania.
IMF Mission Head Confident Romania Will Apply Cut Measures
25 mai 2010, 11:49, English

„I have never seen President Basescu so committed; I have never seen the prime minister so committed to a course of action. I certainly see very, very strong commitment on their part,” Franks told MEDIAFAX in an interview.

Franks is optimistic the government will implement the program, and said that the agreed measures should be enough to cover the gap created in the budget.

The austerity measures „will also do a substantial service to Romania” by reducing uncertainty and help to get isolated from shocks in the region, Franks said.

Romania has pledged to cut public wages by 25% and reduce pensions and other social welfare benefits by 15% in an effort to keep the budget deficit below 6.8% of the gross domestic product, as agreed with the IMF.

The IMF leads a EUR20 billion financial support package for Romania, including funds from the European Union and the World Bank.