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BNS president: IMF to reconsider economic projections for Romania

President of the National Trade Union Bloc (BNS) Dumitru Costin confirmed on Tuesday, after the meeting with the International Monetary Fund delegation, that the international financial institution will reconsider its economic projections for Romania, because the previous set of parameters was slightly too optimistic.

The IMF includes Romania in the category of countries that will witness just a slow recovery (alongside Hungary and the Baltic States), because its economy entered the crisis with an unsustainable domestic boom that fueled an excessively large current account deficit.According to the current IMF estimations, Romania's economic growth will be 0.8 pct in 2010 and 5.1 pct in 2011, after having flipped from 7.3 pct economic growth in 2008 to a shrinkage of -7.1 pct in 2009, reads the World Economic Outlook released by the IMF.Consumer prices are expected to rise by 4 pct this year and by 3.1 pct in 2011, whereas the current account deficit will drop to -5.5 pct from -12.2 pct in 2008.

Romania, the Baltic States and Bulgaria saw their production fall steeply mainly because of the excessive current account deficit and of heavy reliance on external financing, note the authors of the IMF report.The IMF representatives consider that unless reform is carried out, Europe risks entering a second wave of crisis, which will be even more devastating than the first, the BNS president said on Tuesday, after the talks with the IMF delegation.

The 'Cartel Alfa' National Trade Union Confederation represented by president Bogdan Hossu and the National Trade Union Bloc, represented by president Dumitru Costin, on Tuesday morning discussed with the IMF delegation headed by Jeffrey Franks.

An IMF mission is these days in Bucharest to assess the fulfillment by Romania of the conditionalities of the Stand-by Agreement. The mission will then prepare the fourth report on Romania's economic program, which will be discussed by the Fund Board in the second half of June. If the report is approved, Romania will receive the fifth tranche worth SDR 768 million (0.85 billion euros) of the IMF loan.

Trade unions preferring differentiated VAT to tax hikes

Chairman of Cartel Alfa trade union federation Bogdan Hossu stated on Tuesday at the end of talks with officials of the International Monetary Fund (IMF) in Bucharest that as far as the trade unions are concerned, they believe tax hikes are unacceptable and they would rather the application of the Value-Added Tax were differentiated.

A differentiated VAT is preferable because the current system do harms and generate impossible consumption instances for disadvantaged people, and they find it unacceptable for the same VAT to be paid on bread as on luxuries, said Hossu, adding that the IMF will look into this opinion and continue talks.

In relation to redundancies, Hossu said they have to be performed, but they have to be preceded by serious analysis, because cutting the wage pool for the public employees by 0.7 percent of the Gross Domestic Product (GDP) and administrative spending by only 0.3 percent of the GDP is an anomaly. He also said he asked the IMF to assess the correction of the uniform pay law for the public sector, adding that a language blockage has been reached in relation to the law with the World Bank.

The law to reform the public pension law further perpetrates contradictions and lead to mechanisms that are requested but not normal such as increasing the retirement age in a country where life expectancy rates are lower than in many other European Union member states. The pension computation system, said Hossu, is unacceptable and risks continuing the pauperisation of pensioners.

Hossu also said that there is no universal pension law and favouring some public employee categories continue despite the fact that they should have complied with the principle of pension against contributions.

Sursa: http://www.actmedia.eu

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