March 7 (Bloomberg) -- Romania should restore public-sector wages to pre-crisis levels as of June 1 after a 25 percent cut two years ago, President Traian Basescu said.
The Bucharest-based government, which already granted a 15 percent wage increase last year as part of a plan to bring the incomes of public workers back to the level in June 2010, must find a solution to fully restore salaries, Basescu said in a speech in Parliament today.
Former Prime Minister Emil Boc, who resigned on Feb. 6, cut public wages and increased taxes to meet pledges to the International Monetary Fund and the European and keep funds flowing from a bailout loan to help the country exit its worst recession on record. The Balkan nation stopped relying on its international lenders last year as the economy grew 2.5 percent.
“It’s our duty to think and find solutions,” Basescu said. “The country’s budget turned to a deficit in February after a surplus in January and will probably post a minus in March too, but that’s mainly due to bad weather.”
The new government, lead by Prime Minister Mihai-Razvan Ungureanu, pledged to cut the budget deficit to 1.9 percent of gross domestic product this year from 4.35 percent last year.
The country relied on a 20 billion-euro ($26 billion) loan from the IMF and the EU from 2009 to 2011 and secured another 5 billion-euro precautionary accord with the lenders to reassure investors it will keep fiscal discipline ahead of the elections this year.
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