Romania agreed today to adopt further belt-tightening measures in return for the European Union and the International Monetary Fund (IMF) keeping in place a rescue package for the country, according to dpa. Romania's economy collapsed in 2009, necessitating a 20-billion-euro (25-billion-dollar) bail-out from the EU, IMF and World Bank, conditional to budget cuts and structural reforms. The country was meant to reduce its budget deficit to 6.4 per cent of gross domestic product (GDP) in 2010, but the target "would be missed by a significant margin" unless further savings are adopted, the EU and IMF warned in a joint statement. The two organizations, speaking at the end of a two-week expert mission in Bucharest, said a new 7.3 per cent deficit target was agreed with Romanian authorities. The figure would be achieved through "deep cuts in public sector wages and pensions and a targeted reduction in other social benefits," the statement said. It those measures were to prove insufficient, taxes may be raised, the EU and IMF added. Romania's commitments, a precondition for the EU and the IMF to disburse the next installment of their aid package, are expected to be formalized in a memorandum of understanding to be signed in June. Romania was the third EU country to apply for an international bail-out after Hungary and Latvia did in 2008. Greece became the fourth in April, but was the first hailing from the 16-member eurozone, sparking a major crisis in the EU's single currency.
