Foreign debt skyrockets to 86bn euros
The state's desperate need for money caused a surge of the
foreign debt by almost 6 billion euros in the first quarter, to 86
billion euros. Romania has paid 8.6 billion euros on this debt, 23%
less than in the same time of 2009, as a result of the increase in
the share of long-term debt in the total, which comes with a lower
interest.
The quick rise in debt, mainly taken on to pay salaries and
pensions brings out the need to cut the state's spending. Yet the
Government's commitment to the IMF to cut expenses by 2% of GDP
could be delayed since the Social and Economic Council failed to
deliver a clear ruling on the letter of intent to the IMF.
Representatives of the employers' association were unable to
deliver a clear vote, with only the unions voting against.
It remains to be seen whether the Government endorses the letter as
it is or further negotiates it with the unions and employers'
associations. The Social and Economic Council (CES) vote is for
consultative purposes only, but President Traian Basescu said that
if the vote was not favourable, the letter could be
renegotiated.
Finance Minister Sebastian Vladescu says the document had better
leave for Washington in one week, so that the Board could discuss
it next month and Romania could get the fifth instalment of the
loan worth about 800 million euros.