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Romania Plans 2013 Debt Law Changes to Add Thresholds, ZF Says

Romania plans to change its public debt law from 2013 and introduce three debt thresholds, which if exceeded, would trigger automatic budget restrictions, Ziarul Financiar reported today, citing Deputy Finance Minister Liviu Voinea.

The finance ministry wants to add three net-debt growth thresholds at 35 percent of gross domestic product, 40 percent and 45 percent, Voinea told the Bucharest-based newspaper. If the 35 percent of GDP debt level is exceeded, it will trigger a cap on public spending growth in line with inflation.

The 40 percent threshold would trigger a rule to balance local administration budgets and restrict government transfers, while the 45 percent ceiling would stop the government from granting subsidies and state aid, according to Ziarul Financiar.

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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