IMF proposes blanket salary law should be put off

Publish date: 05-08-2009
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The International Monetary Fund (IMF) delegation yesterday met with representatives of trade unions and employers’ association to propose that the passage of the blanket salary law should be delayed in order to allow for mock-ups being implemented of the salary system concerned. 

The head of the IMF delegation in Bucharest, Jeffrey Franks, said that for now, IMF and Romanian authorities are working on a salary system relying on four principles. ‘We want a system which should be fairer, more transparent, simpler and should allow for money savings over time,’ the IMF official said. After the talks, the president of the National Trade Union Bloc (BNS), Dumitru Costin, said that pushing back the original target date of October 31 for the passage of the blanket salary law until after the presidential election would mean the law would only be adopted ‘in 2010 or so’, with law-related costs likely to increase. 

‘I believe that the law being postponed would only lead to rising costs. If government proved unable to make assessments during January through August, to see what the costs are, what jobs, not individuals necessary, should go, which should not necessarily lead to layoffs, delaying such decisions until after elections would only mean to postpone taking some decisions not to disturb certain people,’ Mediafax quoted Costin as saying. 

Costin also stated that the IMF proposed for the overall salary law to rely on a calculated index and not the minimum salary in the economy, a proposal which BNS accepted. ‘The minimum salary cannot be the standard element since it jeopardizes its normal raise and would trigger a massive rise in salaries, which the economy cannot take. So that an index likely to be close to the minimum salary would be taken into account instead,’ Costin said. In his turn, the president of the CNS Cartel Alfa, Bogdan Hossu, said that the IMF proposed the deadline being pushed back to allow for an efficient dialogue with social partners.

Unions opposed to 20 per cent public job cut

Unions outlined at the meeting their opposition to 20 per cent of civil servants being laid off, adding an analysis should be made in order to maintain quality services. Bogdan Hosu said that just laying off a number of employees is not the solution, as it would only bewilder the system and lower the quality of the services provided. In BNS leader Dumitru Costin’s view, making 20 per cent of the state employees redundant risks to ‘take people out of the system, and replace them with the relatives of those in power.’ President Traian Basescu has recently said that ‘a large number’ of public employees who are ‘redundant’ should be made unemployed, context in which he mentioned the 20 per cent rate, adding the government should rush acting in this respect.

Bankruptcies galore

The president of the Romanian Businessmen Association (AOAR), Florin Pogonaru, yesterday said that the state went overboard with spending. ‘Our stand is clear. Budgetary spending is bordering on the absurd, and institutions prove they don’t operate. We don’t expect the upcoming period to be a fortunate one for enterprises. We expect bankruptcies, amid a likely economic decline of 7-8 per cent this year,’ Pogonaru said, adding that IMF forecasts budgetary incomes will fell by RON 17 bln from the original estimate, and the 4.6 per cent GDP budgetary deficit revised target agreed in the stand-by agreement will start from this projection.

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