Romania Fin Min: Renegotiation Of Austerity Measures Would Be Wrong

A renegotiation with the International Monetary Fund of the spending cut measures already assumed by the Romanian Government would be wrong, Finance Minister Sebastian Vladescu said Thursday.

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The Government has pledged to drastically cut spending to keep the budget deficit below 6.8% of the gross domestic product in 2010, from an initial target of 5.9% of GDP.

Romanian authorities have announced several measures to cut public expenditure--such as the 25% reduction of all public wages, a 15% cut in pensions and social aids and freezing early retirements--and a few measures to extend the personal income taxation base--such as taxing food vouchers, capital gains and even the compensatory payments.

In addition, the Government promised to cut the number of public employees by 70,000 this year, to 1.29 million.

Last week, Romania's President Traian Basescu said the government chose to cut the pensions and the salaries in the public sector instead of increasing the flat tax and the value added tax levels.

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