Financial recovery will lead to smaller social contributions
The commitments that the Romanian authorities took on in the cover lent sent to the IMF include reducing not only the budget deficit to 4.4 percent from GDP but also the social contributions in case the Romanian economy picks up.
05 Aprilie 2011, 10:18
In the letter sent to the IMF the Bucharest Executive took the responsibility to reform the state companies, especially the ones belonging to the critical sectors such as energy and transports.
According to the same document, signed by the Minister of Finance, Gheorghe Ialomiţianu, and the NBR Governor, Mugur Isărescu, Romania will ask technical assistance from the IMF and the World Bank Group for simplifying the tax system, and the social contributions will be gradually reduced as the Romanian economy starts to recover.
The reforms in the education and healthcare systems will be continued, and the investment budgets will improve the absorption of the European funds.
The Governments also promises to limit the changes made to the tax system so as to guarantee its stability, and establish a simplified tax mechanism for the small tax-payers.
The Executive has already agreed upon the plan for restructuring the National Agency for Fiscal Administration (NAFA) and asked the Court of Accounts to check the patient’ registration in the general healthcare field
The preventive agreement that Romania closed with the IMF came into effect last week.
The money will be used only in exceptional cases such as an attack upon the national currency triggered by local crises.
The total value of the agreement rises to 5 billion euros.
Translated by: Raluca Mizdrea
MA Student, MTTLC, Bucharest University
