The Romanian Government chooses the easiest way out: the increase in taxes. Elsewhere in the news, Jeffrey Franks, the IMF mission chief, is to announce the financial measures package within seven days. Last but not least, it is possible to have the Romanian Cabinet reshuffled soon.

The Romanian Government chooses the easiest way out: the increase in taxes, Adevarul reads. The foreign funds-lenders do not impose specified measures on Romania, but the Executive's incapacity to reduce spending led the IMF representatives to propose the increase in the unique tax by 4% and in VAT by at least 5%. Companies and tax payers will be forced to pay up the government's inefficiency. Investors will think ten times before coming to Romania, the paper goes on.

The Government lost the lenders' trust one year after they signed the agreement. The IMF resorted to the proposal to increase the taxes to reduce the budget deficit during the negotiations for the fifth loan instalment, sources present at discussions say. The VAT might initially increase to 22%. Sources say the measures might be enforced starting with July 1st.

The Government demonstrated it was incapable of dismissing sufficient state employees and to manage the state benefits. The discussions continue. PM's advisers told Adevarul that every aspect is being negotiated. The Government needs to convince the IMF that it can limit the budget spending. But the state's invoice increased by 2.6% in Q1 against the same time last year.

Staff cuts helped, but services and goods swallow pretty much the same amount of funds. Investments were cut to save more. Transport minister Radu Berceanu declared one year ago that IMF was flexible and that Romania was required "soft" solutions. On Monday, he was complaining that investments would involve an increase in the budget deficit and that resu