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| THE WEEK IN REVIEW 27/09/2010-03/10/2010 |
| (2010-10-01) |
| Last updated: 2010-10-04 17:52 EET |
In Romania this week, unions have continued their protests, putting pressure on the government. They say that the austerity measures that have been imposed have deepened the recession, and they are calling for state salaries, cut by 25% in July, to get back to their former levels, bringing up the minimum wage to 750 lei (around 175 Euro), and maintaining the coefficients in the state salary scheme. At the same time, they are asking for a real investment plan, one that would create jobs. Protesters in health-care, education, police, and even the private sector gathered in front of the main Government headquarters, the Labor Ministry, the Presidency, and some other institutions they believe could meet their demands.
According to Prime Minister Emil Boc, any discussion with social partners has to take into account a few facts: the state employs directly one million two hundred ninety thousand people, has to give them 39 billion lei worth of salaries, and has agreed with the IMF to maintain its budget deficit next year at 4.4% at the most. The government opts for a raise of 50 lei in the minimum wage for next year, bringing it next year to 650 lei.
As for the salary law supposed to come into effect next year, the government would like to increase salaries progressively, raising the smallest ones the most, but the percentage has not yet been decided. The government also proposed amendments to the Labor Code, but unions believe that doing away with open ended labor contracts would threaten job security. Another reason for discontent is the pension law, which now includes a provision to raise the retirement age gradually, bringing it up to 65 years of age by 2030 for both men and women.
The Government in Bucharest has taken certain measures to stimulate private business. On October 1st, a measure was passed eliminating the minimum tax, intensely criticized by businesses, especially small and medium sized enterprises. The minimum tax applied to all businesses, which paid a fixed amount irrespective of whether they made profit or not. The government decided to give businesses that make big investments and create jobs tax incentives of up to 50% of invested amounts. To support the private sector, the executive has cut down interest rates on tax arrears. It has also decided to put off seizing assets for companies with tax arrears as long as the respective company is owed money by the state.
The leading board of the IMF has released the sixth installment of the loan issued to Romania in the spring of last year. The instalment is worth 900 million Euro, which the National Bank will use to prop the national currency exchange rate and strengthen currency reserves. The IMF Board has decided to send a delegation to Bucharest in October to evaluate the running of the accord, and preliminary talks are scheduled at that time for a new agreement with the Romanian authorities. The larger accord signed last year with the IMF, the EU, and other international financial institutions is for the amount of nearly 20 billion Euro. Under the accord, Romania committed itself to revising its social welfare system and the Labor Code, and also to make redundant around 74,000 employees by the end of the year.
The Administration and Interior Ministry this week has a new boss, after Vasile Blaga handed in his resignation. This unilateral decision on his part came after employees of his ministry went on an unplanned protest march. Angry at the austerity measures that have affected them, around 6,000 police employees went to the presidential compound, where they chanted slogans hostile to the president and some of them threw their uniform caps over the wall. As a result of the incidents, the head of state, as well as the Prime Minister, temporarily, refused to use police escorts. In Blaga’s place there came Senator Traian Igas, and his main task is to carry Romania to the Schengen area by March 2011. The conclusion of the Higher Defense Council, which met in Bucharest, on Thursday is that Romania complied with all its commitments towards that goal. The Council also decided that the Ministry of the Interior should intervene quote “in strength” in cases involving gang or organized crime violence.
German writer of Romanian origin Herta Muller, winner of the 2009 Nobel Prize for Literature, came to Bucharest for the launch of two of her novels: “The Cradle of Breath”, about to be published in 45 countries, and “Barefoot February”, the first novel written after she left the country in 1987, following the ban on the publication of her works. When she met her readers in Bucharest, the writer said that, after receiving the Nobel prize, she had written what she referred to as “a few collages”, and that she always tried to leave a two or three year break between novels.
This past week saw the opening of the “Mihai Eminescu” Romanian Cultural Institute in Chisinau, the capital of the Republic of Moldova. At the opening, Romanian Foreign Minister Teodor Baconschi said that the institute’s programs would show that what he called “anti-Romanian clichés” in Moldovan society would be proven groundless and obsolete. Moldovan Foreign Minister Iurie Leanca also believes that, quote “the opening of the Cultural Institute emphasizes a truth that no one can cast doubt on, that recovering and consolidating commonalities in language, culture and tradition on the two banks of the river Prut can no longer be curtailed in a society that wants to be democratic and open towards universal and European values”.
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