IMF agrees to delay of public servant salary law

The International Monetary Fund (IMF), which is currently assessing Romania’s economic indicators in order to decide whether to release the second tranche of a stand-by agreement, is willing to allow the local government to delay the unitary salary legislation for employees in the public sector until after the presidential elections scheduled for this fall. The legislation was initially set to be passed by October 30 and includes a single grid for the salaries of all employees paid from the state budget.

The condition imposed by the Fund’s official was that the new deadline be a “reasonable” one. Moreover, the IMF Mission Chief in Romania, Jeffrey Franks, said that maintaining the national minimum wage as a basis for calculating all the other salaries in the public system is a “potential danger” for the government’s ability to cut budgetary expenses. 

“We drafted four principles for the single salary law. The first is that the system must be fairer, so that employees in various ministries doing the same work can have the same salary. The second requires the system to be more transparent, the third that it must be simpler, because at present it is very complicated, and the fourth principle is to allow for saving money for the state budget. In this context, using the minimum wage as a reference is a potential danger,” Franks said, after yesterday’s meeting with trade unions and the Association of Romanian Businesspeople. 

Trade unions which took part in the discussions opposed this measure, saying it would lead to higher expenses in the public sector. “I believe that postponing the adoption of this law would lead to higher costs. If the government was incapable, from January to August, to make assessments, see what costs and jobs can be cut, not necessarily individuals, a postponement until after the elections means delaying making some decisions in order not to bother some people,” the President of the National Trade Union Block (BNS), Dumitru Costin, said, after the meeting with the IMF officials. 

However, Costin indicated that using the minimum wage as a reference for the other salaries “would be abnormal and would generate a general rise in salaries, which the economy can not bear.” 

On the other hand, the Vice President of the Sed Lex Alliance, Răzvan Bordeanu, said that eliminating the minimum wage as reference will maintain the trend of non-unitary growth of salaries. “A normal hierarchy must be made, and increases must be the same for all categories of civil servants and not depending on sector, as is the case now. The annual increase in the minimum wage would have led to equal growth for everybody,” Bordeanu told Business Standard.

standard.money.ro