Băsescu: "Romania won"t be able to meet targets agreed with IMF for the end of this year"

Romania will not be able to meet the 2009 targets set as part of the agreement with the IMF for the end of the year, president Traian Băsescu announced.

The head of state said that the drop of the economy will be greater than initially agreed with the IMF, (-4%), and he said that the budget deficit must be kept "at around 4.6% of the GDP" in order to allow Romania"s accession to the Euro zone in 2014.

As part of an address on the public radio station, the head of state said: "It is out of the question to exit the agreement with the IMF. The parameters of the first six months show that Romania has managed to meet the targets of the agreement with the IMF. (...) What we can anticipate however, that we won"t be able to meet the parameters set by the agreement for the end of the year. (...) the most important reason for this being that our economic decline will exceed the estimated 4%".

The president said that if the economy falls by more than 4%, the budget receipts will be lower than the projected ones, therefore the public deficit will be larger.

"We need to find solutions to keep the budget deficit at around 4.6% of the GDP, and it is in our interest to keep the parameters in order to access the Euro zone on January 14th, 2014\", the head of state said.

Băsescu estimated that the IMF experts "will be very flexible", because Romania"s economic decline has happened through no fault of its own.

According to the president, the main factors behind the contraction of the economy are the decline of the foreign markets and the contraction of domestic consumption, because Romanians have become more cautious and spend less.

Băsescu: The government has to shed 20% of the number of employees in the public administration sector

The head of state said that the Government should cut the number of public administration employees by 20%, and said that cutting wages won"t help reduce expenses, as the elimination of bonuses can be challenged in court.

Traian Băsescu explained: "All these palliative solutions - keeping the number of employees unchanged and just cutting a few bonuses here and there - are nothing but self-deception. The government must wake up and make massive cuts of the number of public sector employees. (...) I can see why all the political parties would want to have their people working in the public administration, according to their electoral share, it"s understandable. (...) What I don"t understand is the procrastination in trimming out the oversized public sector, by letting a sizeable number of public sector workers go".

The President said that many public sector workers are useless.

Băsescu expressed his convictions that the Executive will need to cut the number of public administration employees, but the problem will be whether this budget depleting apparatus will be downsized before it consumes all the resources of the state.

Băsescu said that bonuses for public servants are set by law, and their payment can be demanded in court, therefore the only way to cut public spending is to lower the number of employees.

"Cutting wages will not work. The solution is to still have public sector workers that have decent wages, while at the same time shrinking the oversized public sector", the president said, as quoted by Newsin.

The president said he "deeply respects" Emil Boc for trying to solve the issues the governmental coalition is facing by negotiating, but he said that when the state budget is "collapsing" there is no room for negotiation.

Băsescu mulls not running for president for a second term

President Traian Băsescu said on Thursday that he is "seriously" considering not running for president again.

"Yes, I am seriously considering this option", Băsescu said on the public radio station, when asked if he considered not running for president for a second term.

The head of state said that he has not yet reached a decision and that the state of the economy currently outweighs his candidacy.

It bears reminding that Traian Băsescu repeatedly said that his decision on whether to run for president again or not would depend on the evolution of the economy.

On May 17, on TV, the head of state said that his decision to run for a new warrant depends on whether the state of the economy improved, adding that he would only feel entitled to enter the race for a second mandate if Romania shows to be "on the way to exit the crisis".