Bucharest, 18 February 1997 (RFE/RL) - Romanians are bracing for tough economic times after Prime Minister Victor Ciorbea last night unveiled a sweeping program of reform designed to gain credibility with foreign investors.
In a 90-minute national television address, Ciorbea said "radical reform of the market cannot be delayed." He said 3,600 state companies will be privatized this year, and that those which are unprofitable will be closed, restructured or sold. He said about 88,000 people will lose their jobs as a result.
To soften the impact of the hardships, he said one third of the state budget will go to social welfare. Child allowances will be increased and unemployment pay will be doubled to around 20 dollars a month. Unemployment is expected to rise to eight percent from the current six.
But Ciorbea said he expects inflation to fall to 30 percent by the end of the year from its current 90 percent and the balance of payments deficit to fall dramatically. Ciorbea predicted last week that economic recovery will become tangible within 12 to 18 months.