Payroll spending cut to 7.4% of GDP in 2011

'The government pledges to narrow the budget deficit from 6.8 percent in 2010 to 4.4 percent in 2011, and further to 3 percent in 2012 and 2.5 percent in 2013. The payroll costs which in 2010 are in excess of 8 percent of GDP will be reduced to 7.4 percent in 2011. Payroll costs keep within the ceiling of 39 billion lei, to which add the employers' contributions to the pension system for the military staff, defence, police and intelligence employees, so that the total figure will be 40.2 billion lei. The nominal cap for the total spending from the 2011 consolidated budget was set at 192.3 billion lei,' said Ioana Muntean.

The government approved the Law establishing the caps on specific indicators set forth under the fiscal framework that incorporates the budget tax strategy; the law will be referred to Parliament for fast-track approval, Muntean said .

The government official added that spending with EU-financed projects will be 2 percent of GDP in 2011. 'One of the priorities assumed by the government is the absorption of European funding. Spending with projects financed from European funds in 2011 will represent 2 percent of GDP, twice the level this year,' Ioana Muntean mentioned.