Romania: since it can’t cut pensions, the government is increasing VAT from 19 to 24%

No pension cuts. No pension cuts, just a VAT increase. This is the latest development of the difficult anticrisis measures the Romanian government has to take. On Friday, June 25th, the Constitutional Court rejected one of the key provisions of the severity program (see our dispatch No. 100384) – the 15% pension cut, and said that this measure was unconstitutional. However, the 25% cut in civil servants’ wages was validated.
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ay, June 25th, the Constitutional Court rejected one of the key provisions of the severity program (see our dispatch No. 100384) – the 15% pension cut, and said that this measure was unconstitutional. However, the 25% cut in civil servants’ wages was validated.

Thus, the government had to find an emergency new anticrisis solution. Indeed, the country has to maintain the public deficit at 6.8%, as the IMF requires, if it wants to keep on receiving money from the €20 billion borrowed in March 2009

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