Romanian PM resigns

Central Europe News Briefs

Romania’s Prime Minister Emil Boc stepped down after three weeks of protests against his austerity programme.

Mihai Razvan Ungureanu, the country’s former intelligence chief and an independent politician, has replaced him until parliamentary elections in November.

Voter confidence in Boc fell sharply after he increased VAT to 24%, cut public sector wages by 25%, and implemented a freeze on pensions to comply with conditions for an IMF bailout loan worth €20 billion.

While Romania’s economy returned to growth in late 2011 after two years in recession, the government is obliged to cut its budget deficit from 4.4% to 1.9% of GDP in 2012 – a figure that is still lenient compared to the deficit limit of 0.5% contained in the “fiscal compact” that EU leaders are expected to sign this month.

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