By Alison Mutler, The Associated Press
BUCHAREST, Romania - Hundreds of people protested outside Romania's parliament on Monday as the prime minister proposed cutting public wages by one-fourth and pensions by 15 per cent.
The opposition Social Democratic Party submitted a no-confidence motion after Prime Minister Emil Boc argued that the government needed to make the sweeping cuts to receive the next instalment of a multibillion dollar loan from the International Monetary Fund and the European Union.
Boc warned the budget deficit would soar to 9.1 per cent of GDP unless cuts are made and Romania would need to borrow euro11 billion (US$13.15 billion) this year.
The government has said 195,000 public sector jobs need to be cut this year and in 2011 to ease pressure on the state budget at a time of a deep recession.
Romania has 1.36 million public workers in a population of about 22 million. Unemployment is currently at about eight per cent.
The country took a euro20 billion ($24.54 billion) loan from the IMF, the EU and the World Bank last year to pay state wages when its economy shrank by 7.1 per cent.