According to the sources, the IMF officials expressed their acceptance of possible public sector salary raises and indexed pensions in the second part of next year, in Wednesday’s meeting with the ruling coalition.
Their agreement does not guarantee such measures would be implemented, given that every letter of intent signed by the Government in the past year stipulated, for instance, that the level of social security contributions might be reduced in the second half of this year if there was sufficient “fiscal space.” So far, the Government has not reduced the contribution rates and announced such a decision is unlikely next year as well.
The same letters of intent to the IMF also state the Government’s objective to allow public sector employees to recoup next year the part of their salaries that was cut last year. Recently, however, Government officials confirmed that the draft budget for 2012 provides no pension or salary raises, at least until the second half of the year.
A joint mission of the International Monetary Fund, the European Commission and the World Bank is in Bucharest until November 7 to review Romania’s progress under a EUR5.4 billion loan agreement signed in April. The talks with Romanian authorities will focus on next year’s state budget and restructuring state-owned enterprises.