FinMin Vladescu: Cutting 25pc off public wages pool will not generate needed savingsPublish date: Astazi, 19-05-2010
Cutting 25 percent off the public wages pool will not generate the savings Romania needs right now, and that is why cutting individual wages by 25 percent is needed, Finance Minister Sebastian Vladescu told a televised show.
'Cutting 25 percent off the public wages pool would fail to generate the savings we need now. We need savings of nearly 20 percent of the net wages pool. Such savings would require 25 percent of the gross wages pool, or else we lose revenues from the social security contributions attached to the pay cuts. Currently, there is no cut available that would mix staff cut with pay cuts because staff cuts now will not translate in savings. Under the current legislation, staff cuts entail diminishing wage spending, a rise in unemployment spending and a drop in social security revenues. We could consider a 40-percent staff cut, but that would be impossible as it would make many systems dysfunctional,' Vladescu explained.
He added that under the agreement with the International Monetary Fund (IMF), which he said is not an agreement for the next two or three months but one that takes into account Romania's need for a fiscal and budgetary strategy for the next three years, it is for the first time specified the wages pool for the next year and the maximum staff count that has to fit in the pool.
Vladescu pointed out that as far as he is concerned, the package of austerity measures unveiled by President Traian Basescu is the best path to follow, the best solution now.
- Insurance market stagnated in 2013 while GDP chare dropped to 1.3%
- The Romanian Leasing Market as of December 31, 2013
- Millennium Bank reports best results since its launch, helped by stronger banking income and cost cuts
- BCR cheapens First Home loans and lowers interest loans for loans in lei
- Millennium Bank's new Salary account clients receive up to 600 lei bonus and their utility bills' payment
- GarantiBank and Seamless introduce SEQR in Romania: the newest mobile payment solution
- Bancpost telecom services, now provided exclusively by Romtelecom and COSMOTE Romania
- Millennium Bank cards offer discounts in Domo stores
- BCR Supervisory Board reshuffles Management Board
- NBR decide to lower the monetary policy rate to 4.25 percent per annum
- Common appointments in Romtelecom and COSMOTE Romania
- Up to 5.5% annual interest rate for Millennium Bank's promotional three-month lei deposit
- Eurozone in recovery mode but gap between North and South still widening
- UniCredit Tiriac Bank and RBS Romania announce the successful completion of the retail clients' migration
- Millennium Bank grants First House loans in lei