Gheorghe Ialomitianu, Finance Minister: we cannot afford to cut VAT in 2011 and 2012; talks about it are purely political. IMF talks target the decrease of some contributions only 

There are political talks regarding a VAT decrease but talks with the IMF target the decrease in the level of social contributions paid by employees, but not of the VAT, Romania’s Finance minister Gheorghe Ialomitianu said for B1TV, a Romanian television. He said that Romania cannot afford a VAT decrease in the next two years because the VAT brings about 40% of the budgetary revenues.

The chief of Finances admitted that there was a risk for the state to not be able to pay salaries but that the adjustment measures taken by the government resolved the situation. Moreover, starting next year, both salaries and pensions might increase. The government also needs to make sure that there is enough money for investments. Increases will be controlled, the minister said.

According to him, the only budgetary personnel cuts will be natural ones. However, the government committed to limit employments.