The Romanian prime minister has announced he and his government will resign immediately to protect the stability of the country. Emil Boc said on Monday he was resigning "to ease the social situation" – referring to weeks of protests in Romania over austerity measures he introduced in 2010. Boc, who became prime minister in 2008, urged Romania's feuding politicians to be mature and rapidly vote for a new government. He defended his record, saying he had taken "difficult decisions thinking about the future of Romania, not because I wanted to, but because I had to". He added that the International Monetary Fund had forecast growth of up to 2% this year – lower than expected, but higher than the European Union average. Romania signed up for a $26bn (£16bn) loan with the IMF, the EU and the World Bank in 2009 to help pay salaries and pensions, after the economy shrank by more than 7%. In 2010, the government increased sales tax from 19% to 24% and cut public workers' salaries by a quarter to reduce the budget deficit. In January, Romanians staged weeks of protests to express anger at cronyism and a perception that the government was not interested in the problems of ordinary people in this country with a population of 22 million. They protested against low living standards, widespread corruption and the passage of some laws without a parliamentary debate. "I know that I made difficult decisions, but the fruits have begun to appear," Boc said in a statement. "The most important thing is the economic stability of the country," he said, adding, "In times of crisis, the government is not in a popularity contest, but is saving the country."
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Monday, February 6, 2012
The Romanian prime minister has announced he and his government will resign immediately to protect the stability of the country. Emil Boc said on Monday he was resigning "to ease the social situation" – referring to weeks of protests in Romania over austerity measures he introduced in 2010. Boc, who became prime minister in 2008, urged Romania's feuding politicians to be mature and rapidly vote for a new government. He defended his record, saying he had taken "difficult decisions thinking about the future of Romania, not because I wanted to, but because I had to". He added that the International Monetary Fund had forecast growth of up to 2% this year – lower than expected, but higher than the European Union average. Romania signed up for a $26bn (£16bn) loan with the IMF, the EU and the World Bank in 2009 to help pay salaries and pensions, after the economy shrank by more than 7%. In 2010, the government increased sales tax from 19% to 24% and cut public workers' salaries by a quarter to reduce the budget deficit. In January, Romanians staged weeks of protests to express anger at cronyism and a perception that the government was not interested in the problems of ordinary people in this country with a population of 22 million. They protested against low living standards, widespread corruption and the passage of some laws without a parliamentary debate. "I know that I made difficult decisions, but the fruits have begun to appear," Boc said in a statement. "The most important thing is the economic stability of the country," he said, adding, "In times of crisis, the government is not in a popularity contest, but is saving the country."
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[Portugal] is now being compared to Greece on a regular basis, and the comparison doesn't look as frivolous as it did a year ago. Portugal's economy is in a slump, and its growth prospects look grim for the foreseeable future. Debt sustainability then comes into question, as it did with Greece. On the plus side, Portugal is funded through the rest of this year due to the bailout it received from the EU/IMF. But its chances of returning to the capital markets in 2013 look slim at this moment in time, and another bailout is not a remote possibility.
In Le Monde this Sunday (article not on their site), there was a paper saying that the troika was somewhat divided between the IMF, that stresses more on competitiveness measures (minimum wage cuts etc) and the UE, that stresses more on diminishing state expenses. But they seem to have found some unity by combining the whole of their measures... The paper also said that the IMF position has toughened with the departure of Strauss-Kahn
Is it possible to have a graphical Euro Crisis Armageddon Clock?
Not a normal one of course, they count down, this one counts up and just racks how many x,000s of days that the 'crisis' has been running.
I don't know about anyone else, but it seems like this has all been going on since I was eating Wham bars, playing marbles, watching Thunder Cats and trying to avoid going into school for economics lessons.
And if it was a case of 'guess the exact number of days and win 1m Euros' I wouldn't even know where to start.
How does it work when your country is subjected to an IMF style structural plan? The IMF promises you funds and in exchange you're supposed to implement its policy. But when the IMF has delivered the funds, what prevents you from delaying, not implementing etc? Is there some kind of "échéancier" (don't know the english word), money delivered drip by drip?
In the case of Greece, we are talking of 130-145 G€. Will it be delivered in one package? How much time does this amount buy for the greek state?
How does it work when your country is subjected to an IMF style structural plan? The IMF promises you funds and in exchange you're supposed to implement its policy. But when the IMF has delivered the funds, what prevents you from delaying, not implementing etc? Is there some kind of "échéancier" (don't know the english word), money delivered drip by drip?
Short answer is Yes.
IMF delivers money in tranches (which may come from the French) and these are dependent on the borrowing government meeting progress targets.
Can't remember which they are on for the current Greek programme but there have been several times when funds have been delayed until the Greeks pledged to do better.
Any 2nd support programme would also be delivered in tranches but Greece needs the first to by 23rd March to avoid a messy default
Greek newspaper Kathimerini reports that agreement has been reached on around €2.5bn of a total of €3.3bn of spending cuts demanded by the troika. As part of this:
• €1.1bn will come from health cuts.
• Local government subsidies and defence spending will each be cut by €300m.
• Greece's minimum wage (which is paid to around 300,000 workers) will be cut by between 20 and 22pc to €750 per month. However, plans to scrap Greece's 13th and 14th "bonus" monthly salaries will be dropped.
• 15,000 jobs will be cut from the civil service by the end of the year. A total of 150,000 public sector jobs will be cut by 2015.
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