Romania to Adopt IMF Agreement Despite Protest

Romania’s government is to adopt the letter of intent to the loan agreement with the International Monetary Fund next week after finishing scheduled negotiations with unions and employers.

Despite public pressure, the government will not give up the planned reductions of salaries and pensions, though it noted that reductions of certain social benefits might be adjusted and minimum social pensions might not be affected by the cost cutting measures.

Prime Minister Emil Boc said Wednesday that the government will seek a confidence vote in parliament for the speedy adoption of the country’s planned spending cuts.

Earlier this month, the government announced that it will cut wages and pensions in the public sector later this year to achieve its 2010 deficit target and comply with an IMF-led rescue deal.

Starting from June 1, state sector wages will be cut by 25 per cent and all salaries, including the minimum wage, will be affected. Jobless benefits and pensions will be cut by 15 per cent.

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