Romania Asks IMF To Allow Higher Budget Deficit - MediaFax

BUCHAREST -- Romania has asked the International Monetary Fund to allow it run a higher budget deficit, at 7.8% of gross domestic product this year, due to delays in applying spending cuts aimed at keeping the deficit in check, people close to the matter told news agency Mediafax late Thursday.

"It is highly likely the IMF will accept a budget deficit of 7.8% of GDP. It could be of 7.7%-7.9% (of GDP)," the sources said.

In August, Romania and the IMF agreed on a budget deficit of 7.3% of GDP this year, nearly double the initial 4.6% cap set in the spring.

Thursday, Labor Minister Mihai Seitan said Romania's budget deficit will most certainly exceed the 7.3% of GDP target, as time to apply the proposed spending cuts is running short.

Seitan said the Constitutional Court's decision acknowledging government-drafted laws on the wage bill and the reorganization of public institutions came too late and the authorities will not be able to apply them in time.

An IMF mission is in Romania for a second review of a EUR13 billion stand-by loan.