Government says in letter of intention to IMF it would freeze salaries for state employees in 2010

The Government will freeze salaries for budget employees in 2010 to reduce salary funds by 0.3% of GDP, will cut bonus payments and payments for overtime work by an amount equal to 0,25% of GDP and will replace only 1 in 7 employees leaving the state system, a Romania letter of intention to IMF says, as quoted by Romanian news agency NewsIn.

The only salaries to be an exception will be those below the 705 threshold, which is the level of minimum salary in the budget system set for 2010.

The document says the implementation of a new pensions law should lead to state budget savings of another 0.1% of the GDP.

Other measures mentioned in the letter of intention relate to cutting budget spending by another 0.9% by other means such as freezing spending on goods and services, transfers and non-social pensions.

In terms of revenues, tax measures in the fields of real estate, tobacco and fuel excises should bring supplementary revenues equal to 0.3% of GDP in 2010.

All measures related to reducing the salary funds would result in savings to the state budget amounting to 0.68% of GDP or 3.585 billion lei.