PM Asks Lawmakers’ Conf Vote For Austerity Plan, Warns Romania Might Go Into Payment Default

Boc began his speech in the Parliament's plenary meeting on Monday with a quote from former U.S. President Abraham Lincoln: "I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts."

Boc told lawmakers that the Government's extremely harsh and unpopular measures must be taken and firmly upheld in order to secure the country's present and future. Boc also accused the country's former liberal government of having raised pensions and salaries to economically unsustainable levels.

According to Boc, failure to apply the Government's austerity measures will put an end to the agreement with the International Monetary Fund, which, he stressed, will have a negative impact on the country's economy, including the risk for "parent banks" to stop granting money for the re-financing of short-term loans currently unfolded in Romania.

Boc reminded that Romania must borrow an additional EUR3 billion even after it cuts budget spending and that, on lack of austerity measures, Romania will go into payment default and will no longer be able to pay pensions and salaries starting with the end of 2010.

Romania's Government adopted two draft laws for which it seeks a confidence vote in Parliament Monday. The austerity plan, which cuts public sector wages, pensions and social welfare benefits, should help the recession-hit country bring its economy on track and convince the International Monetary Fund, which is leading a EUR20 billion rescue package agreed last year, to disburse further installments of the loan.

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