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What the newspapers say: May 26, 2010

de A.C.     HotNews.ro
Miercuri, 26 mai 2010, 8:49 English | Press Review

Most newspapers on Wednesday comment upon President Basescu's declarations last night after a meeting with the governing coalition. One newspaper reads that the President criticized PM Boc and ministers Vladescu, Videanu and Udrea. Another newspaper notes the President's attack against the union leaders' demagogy. Elsewhere in the news, find out how we can avoid another IMF credit.

Gandul notes the President's accusations against union leaders in his speech resuming the meeting with the governing coalition. Basescu reiterated all the economic arguments to reduce pensions and salaries, computing GDP percents, billions needed for a new possible loan and calculating the inflation if the government would choose to increase the VAT and the flat tax instead of diminishing budgetary costs.

Basescu promised to send IMF director Dominique Strauss Kahn the document which resumed the IMF's mission and that urged the government to increase taxes and cut budgetary salaries by 20%. He also attentioned opposition leaders who are trying to trigger instability.

Plus, the President attacked union leaders, accusing their demagogy.

Elsewhere in the news, Evenimentul Zilei notes that the President attacked PM Boc, together with ministers Vladescu, Videanu and Udrea for their lack of transparency in tenders involving the state's money.

Basescu accused Finance minister Vladescu that his ministry does not publish the revenues of fiscal inspectors. Moreover, Basescu accused some state secretaries who earn huge revenues just because they are members in three administration councils.

Romania libera
notes how we can avoid another IMF credit, if the government implements the measures announced. The executive faces problems to gather up a majority in the Parliament to support the budgetary restructure. Because negotiations are lagging, the government decided to present the law to the Parliament next week.

The urgency of the measures is given by the deadline imposed by the IMF. If Romania does not cut costs fast, it will not see the next installment. The state would need to take up loans from the market, at huge rates.

If the government does not satisfy the requirements of the IMF, next year it will be compelled to take up another 30 billion euro loan. The newspaper notes that there are 2 options. First, the pack of laws is rejected in the Parliament, the government falls and the future cabinet either finds alternatives to cut costs or it will break the IMF agreement with catastrophic consequences on the exchange rates and not only.

Second, the Parliament approves the pack of laws and the government needs to implement them starting June 1. The procedure needs to be finished by June 20 and needs to have the constitutionality guarantee to be approved by the IMF.

In the first stage, up to June 20, salaries in state companies will be cut by 25%, to cut losses and eliminate budget subsidies. Plus, salaries and pensions will be reduced by 25% and 15%. Fiscal evasion will be countered with some separate law amendments.

Then, the IMF board will decide whether it will release the fifth installment for Romania.























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