IMF Expects Harsh Austerity from Romania

Finance | August 4, 2010, Wednesday // 11:59|  views

The IMF said it expects Romania to keep on “extremely harsh austerity measures” in order to receive the last EUR 900 M installment of a EUR 20 B loan.

It added that the IMF mission end of June “achieved good results” and expressed optimism about the country's prospects of reining its economic and financial situation.

“Once the Romanian authorities fulfill initial conditions, the Board will meet and give approval for the last installment of the loan,” said IMF's representative for Romania Jeffrey Franks.

Austerity for Romania includes decrease of state-sector salaries by a staggering 25% and a VAT hike from 19% to 24%.

The IMF representative said he expected that if those measures are observed there would be no need for additional tax hikes or cuts from salaries and pensions.

A chief goal of the austerity measures it to keep Romania's budget deficit for 2010 at 6.8%.

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Tags: IMF, Romania, austerity, budget deficit, VAT hike, cuts, economic crisis


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