Thursday, June 24, 2010

Romania’s Vladescu ‘Optimistic’ on Receiving Next IMF Payment

June 23 (Bloomberg) -- Romanian Finance Minister Sebastian Vladescu said he is “optimistic” the country will receive the next bailout payment from the International Monetary Fund after a court decides whether government austerity measures are legal.

The Constitutional Court tomorrow will review challenges to spending cuts the government proposed to meet an IMF-mandated budget deficit of 6.8 percent of gross domestic product.

“I’m optimistic about the next payment,” Vladescu told reporters today after a government meeting in Bucharest. “If the Constitutional Court clears the law, then the IMF board will discuss it on the 28th. I have no reason to doubt Romania will get the IMF money.”

The EU’s second-poorest member is relying on 20 billion euros ($24.5 billion) of loans to resurrect its economy after the worst recession in 60 years. The next IMF installment would be 850 million euros, with 1.2 billion euros scheduled to come from the European Commission.

Prime Minister Emil Boc survived a no-confidence vote last week after opposition parties opposed his plan to reduce the wages of public employees by 25 percent and pensions and jobless benefits by 15 percent.

The government today extended the 16 percent flat tax to meal tickets, copyrights, interest on bank deposits and capital gains from July 1 as it seeks to boost dwindling revenue, Vladescu said. The measures will generate revenue equal to 0.3 percent of GDP he said.

In addition, state-controlled companies, including publicly traded utilities Transelectrica SA and Transgaz SA, will transfer 90 percent of their annual profit to the state budget, up from 50 percent, Boc said at the same briefing as Vladescu.

“State-owned companies must be part of the solidarity effort to support the state budget,” Boc said.

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