The normative act was published in the Official Journal Thursday.
Government spokesman Andrei Zaharescu said on September 1 the draft act was only discussed at first reading.
The ordinance says local authorities with overdue debts to the state budget must reduce the amount of debts monthly by at least 5% or the regional public finance units and the Bucharest General Public Finance Department will transfer state budget funds into their accounts only to pay salaries and related social security contributions.
Erik de Vrijer, head of the International Monetary Fund mission to Bucharest, said in August Romania must reduce the level of local government arrears. He added that IMF’s approval of the sixth review of Romania’s progress under a multilateral loan program is conditional on several key projects, including this one.
According to the country’s Fiscal Council, arrears monitored by the IMF (debts overdue by more than 90 days) rose by about 205 million lei (EUR45.7 million) between March and June 2012, mainly because of increases in local budget arrears. (EUR1=RON4.4816)