Romania’s centre-left cabinet said on Tuesday it will freeze public sector wages, scrapping earlier plans to increase wages for government employees, as part of an attempt to cut spending.
The government led by Prime minister Emil Boc plans to cut spending to roughly 1% of GDP in order to meet demands laid out in the €20 billion International Monetary Fund aid package agreed upon a month ago.
While Boc said his government still plans to increase small wages, he cautioned that this will only be possible if the public finances allow it. “We will discuss any potential wage hikes in the public sector only if economic condition allow, following further saving from restructuring government-run agencies,” said Boc.
Romania, which became EU member in early 2007, is the third member of the bloc to be bailed out by the IMF and is facing economic turmoil due to an increase in foreign currency debt and a growing budget deficit. (Balkan Insight)