Romania’s letter to IMF: the Government will freeze public sector wages in 2010

Romania’s letter to IMF: the Government will freeze public sector wages in 2010

Romanian government will freeze salaries for the public sector employees in 2010 to reduce the pay fund by 0.3 % of the GDP, will cut bonuses and overtime by 0.25 % of GDP and will replace only one of the seven employees that leave the system, shows Romania’s letter of intent to IMF, dated September 2009.

IMF made public on Wednesday the additional letter of intent of the Romanian Government to the EUR12.95 billion two-year standby agreement the eastern European country secured in spring.

The letter, approved by the government on September 22, includes a series of fiscal and economic policies the country pledged to implement to meet the IMF financial aid terms.

In the letter, the Romanian government admits

Romania is facing a severe economical drop and estimates the economic landscape will keep on being difficult by the rest of 2009.

• The implementation of new pension law should bring to the state budget another 0.1 % of GDP, according to the cited document.
• Pension reform will include also the rise of the retirement age
• We keep our engagement of approving the pension reform by the end of December 2009.