Saturday, January 31, 2009

Romania Approves Tight '09 Budget

Romania's parliament has approved the country's 2009 state budget which sees cuts in public spending and increase in infrastructure outflows. Around 10 billion euros, or around 20 percent of the budget, will go to investment that will create jobs, or to help finance businesses which are suffering in the global economic downturn.

The center-left government will also allot 250 million euros to a state bank to support small- and medium-sized businesses during the economic crisis. The government said that starting next year any profits that are reinvested in business would not be taxed.

The government wants also to show solidarity with low-income Romanians and will raise pensions and wages in the public sector by 5 percent in 2009, matching its expected average inflation rate. The
increases will take place in two stages, in May and November.

(Reporting by Marian Chiriac)

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