Romania Pledges To Cut Staff Costs By 0.2% Of GDP In 2010

Romanian government pledged to cut public personnel expenditure by 0.2% of the gross domestic product in 2010, according to the country’s latest additional letter of intent to the standby agreement with the International Monetary Fund.

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Imaginea articolului Romania Pledges To Cut Staff Costs By 0.2% Of GDP In 2010

Romania Pledges To Cut Staff Costs By 0.2% Of GDP In 2010

The document, obtained by MEDIAFAX Tuesday, stipulates similar spending cuts from reduced pays for overtime and bonuses.

"The 2010 budget envisages a deficit of 5.9% of GDP, which entails a correction of 2% of GDP in structural terms. As anticipated in September 2009, the bulk of the measures will be aimed at the expenditure sector," the document noted.

Romanian authorities committed to further reduce salary costs, including wage freezing in the public sector, with the exception of minimum salaries. The measure would save the budget 0.3% of GDP in 2010.

In addition, public institutions are to hire only one person for seven who leave the system and to limit overtime pays and bonuses, measures which will lead to further savings of 0.2% of GDP.

The country's new pension law is seen cutting public expenditure by another 0.1% of GDP this year, according to the document.

Romania and the IMF agreed last spring on a EUR13 billion stand-by loan, as part of a EUR20 billion package that also includes funds from the European Commission, the World Bank and other international lenders.

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