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| ON CONFIDENCE 08/06/2010 |
| (2010-06-08) |
| Last updated: 2010-06-09 14:30 EET |
The two draft laws essentially stipulate a 25 per cent cut in public sector salaries, a 15 per cent cut in pensions and the slashing of other forms of social assistance. In his address before Parliament, Prime Minister Emil Boc reiterated the well-known idea that Romania consumes more than it produces, but emphasised that the country was undergoing its worst economic crisis in the last 60 years. Unless the measures planned by the government to redress the budget balance are accepted, the country's default on payment is imminent, and by the end of the year the government will be unable to pay any salaries and pensions, the Prime Minister warned. He also put forth the idea that, except for the reduction of salaries and pensions, the only way to narrow the budget deficit would have been by raising the current 19 per cent VAT rate and the 16 per cent flat tax rate. Emil Boc:
“What would have a raise in taxes meant for the private sector? It would have ruined the driving force behind the country's economic recovery. Increased taxes, in the current context, would triggered the closing down of at least 50 thousand businesses in the second half of 2010 alone. Increased taxes would have definitely entailed increased inflation and, obviously, a lower purchasing power for the people.”
Advertised by the president, prime minister and their supporters as the only way out of the economic mire, the austerity measures are heavily opposed by trade unions, the opposition and the media. They criticise both the primitive thinking behind the undiscriminating wage reductions, which condemn the already poor pensioners and public sector employees to extreme poverty, and the hypocrisy of Power, which deals heavy blows to everyone, except for its cronies.
From the opposition, the Social Democrats and the Liberals have already prepared a motion of censure, which once endorsed, would not only halt the entire austerity package, but also bring down the government made up of the Liberal Democratic Party, the Democratic Union of Ethnic Hungarians in Romania and the National Union for the Progress of Romania. The power still has, in theory, a 20-vote lead in Parliament. But analysts believe that there are plenty of Deputies and Senators from the ruling coalition who may cross party discipline so as not to betray the public sector employees and pensioners in their own constituencies, who elected them in the uninominal voting system.
The daily paper ROMANIA LIBERA voices its confidence that, regardless of the fate of that motion, the government's days are “numbered and bleak.” Because, “no government in the world can apply radical measures unless it has the confidence of its people. And no one in Romania still believes that the Boc government is able to come up with anything good. No one has any trust left.”
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