Budget cuts, in the first reading: “trimmings” on all levels

The Romanian government discussed yesterday, in its first reading, the state budget cuts and the social insurance budget, in order to adjust the national deficit from 4.6% to 7.3% of the Gross Domestic Product (GDP).

“The budget cut will make adjustments in all the ministries, in an even matter, because my interest is to ensure the functioning of the state and money for investments. The staff budget cut is also taken into account, by introducing 10 days of vacation, of the spending with goods and services, because this is the situation, the income has dropped” said the minister of Finance, Gheorghe Pogea.

The adjustments sight budget cuts in salaries, awards, goods and services with 4.5 billion Lei (0.9% of the GDP) and the accession of the Ministry of Internal Affairs (MIA) budget and that of pensions. Following the agreement with the IMF and the European Commission Romania could raise the deficit at 7.3%, from the previous projection of 4.6%, negotiated last spring. After the first seven months of 2009, the general budget deficit reached 3% of the GDP. Also, after the first evaluation made by the IMF at the beginning of August, the IMF anticipated a 8-8.5% drop in Romania’s GDP, over the convened limit.