Băsescu wants to cut the number of public sector workers by 5%

The cabinet led by Emil Boc yesterday attended the Cotroceni Palace, to consult with the president, after Traian Băsescu expressed his discontent with the the lack of measures intended to cut public spending and the slow pace of decentralization.

Traian Băsescu recently said that "he hardly noticed" any layoffs in the public sector, and discussing decentralization, he said yesterday that the process "isn"t truly happening and at fast enough pace".

The head of state explained that he wants to consult with the members of the government on the things that need to be done to accelerate Romania"s exit from the crisis and to prevent her from living on borrowed money: "We can see a little further to the South what happens when a country does that", the president said, referring to Greece"s financial problems.

These aspects were also discussed yesterday by the official of the IMF for Romania, Tonny Lybek, who stated for Mediafax, that the budget deficit target for 2010 that Romania agreed upon with the IMF is already "very big".

Tonny Lybek stressed that on the occasion of the next evaluation of Romania"s economic program by the IMF, the fund will also review the way the steps that the government has taken towards cutting public sector spending:

"On the next evaluation we will review the entire macroeconomic environment. We are reviewing all factors and we will analyze the way the Romanian government has fulfilled its commitments to cut budget spending". The release of a new EUR 850 million tranche of the loan will depend on this evaluation of how much the Government has done to cut public spending.

The parties in the opposition called the meeting between the president and the members of the government "a masquerade" and a new example of "politics for the benefit of TV viewers". They said that instead of that "government meeting", the Executive should have worked on coming up with solutions for the issues of the Romanian economy.

However, the ministers" folder (who received from the PM the task of presenting a restructuring plan for the ministries they are leading) included a report which shows that the government intends to cut personnel spending by 5% compared to 2009. The report was drafted on Monday by the Government, following the meeting which preceded the consultations from the Cotroceni palace.

The expenses will be cut predominantly by layoffs in the public administration sector, which will take place from September to December period, and will continue into next year.

All this comes as several ministers recently said that they would not perform further layoffs. "From my point of view, there is no issue, because the Ministry of Transports has already reached its quota of layoffs", minister Radu Berceanu recently said. "The Ministry of Labor will not lay off any more employees", Minister Mihai Şeitan said.

However, prime-minister Emil Boc stressed that the government"s objective for this year was to cut employee spending from 9.4% to 8,7% of the GDP.

The PM said that expenses with employees in the public sector decreased 16% between December 2009 - February 2010 and said that the budget deficit would have climbed to 12% in 2009 and to 17% in 2010, had his government followed the policy of the government led by Călin Tăriceanu. Referring to the reforms of the pension system and salaries in the public sector, president Băsescu said that the Government has taken bold steps, even though they were extremely difficult.