If we do not cut wages, we'll need a new loan in 2011

President Traian Basescu explained yesterday after the meeting with the unions why the wage cut step had been taken: If it does not happen, we would have to take another loan in 2011 and Romania is already paying 10 billion euros on foreign debt as it is this year. Basescu remained firm in his position: all wages will be cut by the same percentage.
This seems to be the option accepted by the IMF. Jeffrey Franks, the head of the IMF mission, however, wanted to make it clear that it came from the Romanian party.
The unions announced after the meeting with the chief of state at the Cotroceni Palace yesterday that they would not drop the protests announced, with the schedule to be set this week. Opposition parties, PNL (National Liberal Party) and PSD (Social Democratic-Party), which received a visit from the IMF delegation, too, announced they continued to disagree with the step to cut public sector wages by 25%, and pensions and unemployment benefits by 15%. The government may have some trouble getting the measure approved by the Parliament, because it has to be endorsed via a law draft or an emergency ordinance, which, however, has to be approved by the Parliament, too.