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| THE STATE BUDGET AND SALARIES 29/04/2009 |
| (2009-04-29) |
| Last updated: 2009-04-29 14:15 EET |
Less than two months after the enactment of the state budget for 2009, it has already been subject to its first amendment as a result of the worsening of the economic situation leading to a drop in revenues. The amendment refers mainly to the elimination of salary inflation adjustment, a cut in the expenditure of a number of ministries and the introduction of fiscal measures like the controversial lump sum tax for small businesses. Pressured by the crisis and criticised by trade unions and its political opponents, who accuse it of lacking in ideas, the government is fighting back. Prime Minister Emil Boc has given assurances that the budget amendment approved by Parliament will not lead to a drop in salaries for public employees. The finance minister, Gheorghe Pogea, defended the lump sum tax, which, in his opinion, can bring stability to an ever poorer budget. Minister Pogea has also dismissed as ungrounded the warnings coming from business people and the Liberal opposition, according to whom this minimum tax levelled even on companies that make no profit, will cause the bankruptcy of many businesses.
The Liberals are accusing the government made up of the Liberal Democratic Party and the alliance of the Social Democrats and the Conservatives, of turning the public system into a system of demagogy, cynicism, inability and deceit. Public employees, too, seem to have lost their patience, because the government has failed to keep its promises about salary increases made in the election campaign but shattered by the crisis and the recent announcement that not even basic salary indexations will be operated this year. The government has passed an emergency ordinance which in effect blocks any type of salary increases by the end of the year. Minimum salaries and pensions are not affected by this measure as they will not be reduced, promises the Prime Minister. He did leave some room for salary increases, but only if the economic situation permits it:
“If the government, supported by the economy, has the needed financial resources, then we can talk about salary increases. But that will only happen if the agreement with the International Monetary Fund and the European Commission has the expected results, if the economy recovers in the coming period and, of course, if there’s still any money left in the budget after the restructuring of the government agencies and other state bodies, which would allow us to find the financial resources to increase low salaries and low pensions.”
Teachers, who were promised substantial increases under a law passed last year but who in the meantime have seen hopes shattered because of the crisis, are planning protests both against the freeze of salaries and the budget amendment, which they believe to entail a drop in incomes. The president of the Spiru Haret Trade Union Federation, Gheorghe Isvoranu:
“Mr Boc lied when he said he would freeze salaries, when he in fact reduced them through this amendment, and consequences can be seen at local level. We have already been receiving letters from the local administration and school authorities, telling us about the reduction of personnel costs by 8 to 20%. Mr Boc has been acting irresponsibly towards all low income employees in Romania, not only teachers.”
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