Romanians demand cuts to satisfy IMF be scrapped

TENS OF thousands of Romanians rallied in their capital Bucharest yesterday to demand the government scrap plans to slash wages and benefits to secure payment of a vital international loan.

Some 40,000 people took part in one of Romania’s biggest demonstrations since the revolution that toppled communist dictator Nicolae Ceausescu in 1989, and many participants warned of the potential for huge strikes and street violence unless austerity plans were eased.

President Traian Basescu announced this month that salaries for state workers would be cut by 25 per cent and pensions and other benefits reduced by 15 per cent to help curb a ballooning budget deficit and fulfil a pledge to the International Monetary Fund.

The IMF will only pay the next instalment of a €20 billion emergency loan if the government makes painful cutbacks to shrink the current 6.8 per cent budget deficit, which experts say could swell to 9 per cent of gross domestic product this year unless major savings are made.

Central bank governor Mugur Isarescu said recently that the Romanian state could currently pay for only about two-thirds of its monthly outgoings, and had to borrow to cover the rest.

“Today is the most important solidarity test for the trade union movement in Romania,” said one union boss, Marius Petcu. “We are many, we are strong and, today, here, we are all very unhappy,” he added, before urging Mr Basescu and his centre-right government to resign.

Successive governments since 1989 have failed to scale down Romania’s bloated, inefficient and corrupt public sector. It employs about one-third of the working population, while pensions and other benefits account for some two-thirds of the state budget.

A credit-fuelled boom that coincided with Romania’s 2007 entry into the European Union helped paper over the budgetary cracks, but the economic crisis has sent the country of 21 million people tumbling into recession and made it very hard for the government to keep funding its deficit.

Unions say they are prepared to launch a general strike at the end of this month to stop the austerity measures, which the IMF wants to see approved before July.

“Protests will be worse than in Greece,” said pensioner Maria Ungureanu. “We have to protest violently to make the government step down. I am willing to die in the streets; maybe my children and grandchildren will live a better life,” she said.