UPDATE: General strike starts on May 31, Govt. approves letter to IMF

Public employees working in education, the health care system, public administration and transport will start a general strike on May 31st, the largest five workers unions in Romania have announced earlier today. The strike will expand over an undetermined period of time, unions said. This will affect, among others, the high school final test, which was scheduled for the upcoming period. Doctors will only cover 30 percent of the cases and emergencies. The public clerks will protest against the announced 25 percent salary cut for budget-paid jobs. A 15 percent cut in pensions has also been announced. Various protests have already been organized across the country, as well as discussions between workers' unions and government representatives, but there was no consensus. Moreover, Romanian president Traian Basescu has recently said he was supporting the changes and insisted on Romania sending the letter of intention to the International Monetary Fund with the proposed public spending cuts. Meanwhile, prime minister Emil Boc said the government will take responsibility for the austerity measures, which will only be applied until the end of this year. All pensions will be cut by 15 percent, apart from the minimum guaranteed social pensions of RON 350 (around EUR 83). The minimum salary will also stay at RON 600 (around EUR 143). Special pensions will be re-evaluated, the same as pensions for illness. Romanian government representatives have said they chose to reduce public spending instead of increasing the flat tax and the VAT, which was the other option offered by the IMF. However, there could be a future increase in taxes, according to Mugur Isarescu, the governor of the Romanian central Bank (BNR). While workers unions are trying to prevent the Romanian government to send the letter of intent to the IMF with the proposed changes, unionists say the Finance Minister Sebastian Vladescu will leave to Washington tomorrow (Thursday, May 27), to discuss changes to the letter with the IMF experts. The Government is currently in its weekly meeting. Updates will follow shortly. UPDATE 1: The Romanian Government has approved the letter to the IMF as it was initially announced, including a 25 percent salary cut for the employees in the public system, 15 percent cut for pensions, in order to achieve a 6.8 percent budget deficit, the prime minister Emil Boc has announced. Some members of the government will also meet on Sunday. The two cost cutting measures will be included in two law projects. UPDATE 2: The Government has also decided to expand the tax base, including several categories of revenues which were tax exempt. These includes IT programmers' revenues, interests on deposits and current accounts, interest on gift vouchers and on meal vouchers, as well as compensation payments. The state will also give up on subsidies for heating, holiday tickets for pensioners. UPDATE 3: Prime Minister Emil Boc has announced several infrastructure projects which will be started and some finalized this year and in the next two years, among which several highways and national roads, which will be financed with the savings Romania will make after cutting expenses. UPDATE 4: Finance Minister Sebastian Vladescu says increasing taxes is out of the question by the end of the year. "We don't need to increase taxes at this moment". If the cost cutting will not be approved by the Parliament in due time, the Government can cut further costs so that it doesn't miss the time target agreed with the IMF. UPDATE 5: The child care allowance will also be reduced by 15 percent, according to the government. Transport and medical care expenses in the state administration will also be reduced by 25 percent. A cut will also be applied on the contribution to mandatory private pensions, according to minister Sebastian Vladescu, but the actual value of the cut was not yet announced. The letter of intent will be send to the IMF shortly, after it will be signed by the prime minister and the president.