BUCHAREST (Reuters) - Romania's anti-discrimination watchdog fined a city mayor on Wednesday for a speech inciting hatred after he suggested would-be parents should be screened and the rights of the Roma ethnic minority to have children restricted.

Dorin Florea, mayor of the central city of Targu Mures, said on Facebook the European Union state should screen would-be parents for stable jobs, financial resources, age and education levels, and even remove children from families who do not fit the criteria.

"I don't think we should boost demographics at any cost," Florea added. His comments came as parliament voted in December to double subsidies for school children.

"There are many underprivileged families in Romania, I am ... talking about people able to work who don't want to work and who are having children with the sole purpose of having a source of income. This environment generates high crime rates, (school) drop-outs, lack of an education."

Asked to clarify what he meant, Florea later told online news publication HotNews.ro that "gypsies are a serious problem for Romania and we're pretending we're not seeing it".

The Roma are Europe's largest ethnic minority. Out of an estimated 10-12 million, more than half live in the EU, which Romania joined in 2007, and many are victims of prejudice and social exclusion.

In Romania, the World Bank has estimated nine out of 10 Roma live in severe material deprivation, most of them children, lacking access to basic education and healthcare.

Social inclusion programs and anti-discrimination laws are in place, but racism against the minority goes back centuries in the country, where Roma were kept as slaves by monasteries or local overlords until the 19th century.

Roughly 25,000 Roma were deported from Romanian-controlled territory during World War Two, when the country was an ally of Nazi Germany. Almost half of them died.

The anti-discrimination watchdog found Florea infringed on the right to dignity of an ethnic minority and fined him 10,000 lei ($2,320).

Florea, a 63-year-old doctor who has been mayor of Targu Mures since 2000, has said he will not retract his comments and that he will challenge the fine.

(Reporting by Luiza Ilie; editing by Nick Macfie)