UPDATE 1 - Romania Approves Fourth Revision to 2008 Budget, Keeps Budget Gap Target at 2.3%/GDP

The most important change made with the revision is the allocation of 1.085 billion lei ($371.6 million/285.3 million euro) to the country's Labour Ministry, Tariceanu told a news conference.

Tariceanu dismissed claims by President Traian Basescu made late on Monday that the state pension fund has "collapsed" and does not have the money to pay the higher pensions approved earlier this year.

Local governments will receive additional 570 million lei to cover a 9% hike in teachers' wages as of October 1, the premier said. Romania's Health Ministry will get a further 70 million lei and the Interior Ministry will get an additional 33 million lei under the revision.

Earlier this month the European Commission projected that Romania's budget shortfall will be equivalent to 3.5% of GDP this year due to the country's persistently loose fiscal policy.

Romania joined the European Union last year.

(1 euro = 3.8029 Romanian lei)