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| REVIVING SOCIAL DIALOGUE 18/05/2010 |
| (2010-05-18) |
| Last updated: 2010-05-19 15:57 EET |
The move fell through, however, as talks between representatives of the executive, of employers' associations and trade unions, who got together in the Economic and Social Council, only highlighted different opinions of the parties. Everybody agrees that the cut in the budget spending is a must. But whenever it comes to setting the reduction thresholds, rifts appear. Trade unions staged tough protests after the intention to cut salaries by 25% and pensions by 15% as of June 1st was announced. Unemployment and child benefits are also expected to be slashed.
All those measures and other measures are laid down in the letter of intent that government officials have prepared following talks recently held with the joint delegation of the IMF, the World Bank and the EU. Discontent, trade unionists threaten with a war of attrition, marked by rallies and strikes and, jointly with employers' associations, are calling for the document to be modified. By and large, employers' associations and trade unions have put forth similar anti-crisis measures, among which the most important is economic recovery by fostering investment and combating tax evasion. Moreover, they agree on a 25% cut in the salary fund, but propose that income cuts be operated differently. They say that pensions lower than 1000 lei (about 240 euros) should remain unchanged.
In conclusion, union leaders believe that the executive's proposals are unacceptable and want another version of the letter of intent, while employers' associations insist on the need for economic recovery measures. On the other hand, government officials warn about the increasing time pressure. Finance Minister Sebastian Vladescu claims that Romania's public debt will increase at an alarming pace, unless budget deficit reduction measures are carried out, that have been agreed on with the IMF. The current budget deficit stands at 30% of the GDP and may rise until the end of next year to approximately 40%. The reaction of political parties reflects the position they have with regard to the rulers. While Liberal-democrats show solidarity with the austerity measures put forth by the Boc cabinet, opposition Liberals have rushed to defend the unions and employers' associations, and social-democrats have announced they will introduce a no-confidence motion, which will also be backed by the National Liberal Party.
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