Romanian Govt Pledges To Sack 74,000 State Employees In 2010, At Least 15,000 In 2011

According to the letter of intent signed with the IMF, the country met its budget deficit target set for the fist half of the year, mainly by cutting costs and reducing the number of state employees by 27,000.

The letter reads that fiscal adjustments in the second half of the year will be made through the measures adopted recently, namely the increase of the value added tax by 5 percentage points, to 24% from 19%, the reduction of state employees' wages by 25% and of social benefits by 15%, as well as through additional layoffs.

During negotiations with the IMF, the Government also pledged to reduce the country's budget deficit to 4.4% of the gross domestic product in 2011, saying that the measures implemented in 2010 will be enough to meet this target.

According to the letter of intent, this austerity measures would allow wage increases in the public sector in 2011, provided 15,000 other state employees are laid off next year, so that staff spending be reduced below 39 billion lei (EUR1=RON4.2527).

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