Austerity cuts ruling set to delay IMF loan

A TOP Romanian court has said that sweeping austerity measures proposed by the country's government are unconstitutional, a move that will delay a crucial multi-billion loan from the International Monetary Fund.
By The Newsroom
Published 25th Jun 2010, 22:26 BST
Updated 25th Jun 2010, 22:26 BST

The ruling from the Constitutional Court came after dozens of Romanians tried unsuccessfully to storm the presidential palace to protest the measures and demand an audience with President Traian Basescu.

Riot police repelled those who tried to force their way past barricades.

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The court did not immediately publish its reasons for ruling that the 15 per cent cuts to pensions and 25 per cent cuts to public sector salaries were unconstitutional.

The government will now likely hike the consumer tax and income tax rates to meet the IMF demands for the loan and to keep the budget deficit at 6.8 per cent.