Romania's government will rationalise public spending, including cutting public payroll among top public servants, and will thus save some RON 6bn (EUR 1.2bn) by the end of the year, prime minister Marcel Ciolacu (Social Democrat) said on July 31 after another round of negotiations among the ruling partners.

He announced that an agreement was reached between the ruling partners on a broad fiscal consolidation strategy. As part of this strategy, tax breaks with a total impact on the budget for the rest of this year of RON 6bn (EUR 1.2bn) will be terminated as well, PM Ciolacu added.

The combined EUR 2.4bn savings PM Ciolacu wants to achieve by the end of the year account for 0.75% of the entire year's GDP.

Liberal (PNL) leader Nicolae Ciuca detailed the austerity measure among top public servants. Reducing by at least 20% the number of state secretaries, halving the number of members of local authorities' cabinets (presidents and vice-presidents of county councils, mayors, deputy mayors) and representatives of the central authority in the territory (prefects and sub-prefects), reducing the number of management positions from 12% to 8% of all employees in state bodies, abolishing unnecessary management positions and increasing the number of employees subordinated to those who hold management positions, granting holiday vouchers only to civil servants who have monthly salaries of less than RON10,000 gross are some of the measures decided by the ruling coalition.

Not that much was unveiled about what tax breaks and other allowances will be terminated.

(Photo: Gov.ro)

iulian@romania-insider.com