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Reuters: Romania court endorses budget, IMF-backed pay bill

Romania's top court backed the government's 2011 austerity budget and a key public pay reform bill on Tuesday, clearing the way for vital cash from an International Monetary Fund aid deal early next year.

The Constitutional Court's decision, dismissing a legal challenge by the opposition Liberals, had been widely expected.The main challenge to the government's austerity plan and its reform bills for public sector pay and pensions was mounted in parliament last week, when the fragile coalition government of Prime Minister Emil Boc survived two no-confidence votes.

The wage bill, which can now become law, aims to make public pay more transparent and predictable by cutting discretionary bonuses and setting up criteria for pay hikes in Romania's bloated public sector, which employs about a third of the country's workforce.It is one of the reform packages needed to cut next year's budget deficit to 4.4 percent of gross domestic product, from this year's estimated 6.8 percent deficit.Romania can now expect to receive a combined 2.1 billion euros worth of IMF and EU Commission tranches early next year under its rescue deal, which expires in March 2011.

The leu currency <EURRON=> and the Bucharest stock exchange <.BETI> remained flat on the day in thin trade after the court ruling, suggesting markets had fully priced in a positive decision for the government. However, uncertainty is likely to dominate domestic politics also this year as well, as Boc struggles with strong public discontent, while the once booming economy still lingers in recession, lagging its central European peers.

Sursa: http://www.actmedia.eu

Tags: public budget court

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