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| THE WEEK IN REVIEW (12-18.11.2007) |
| (2007-11-16) |
| Last updated: 2007-11-26 15:56 EET |
The central Romanian city of Sibiu, designated 2007 European Capital of Culture, played host to the 3rd joint meeting of the Romanian and Hungarian governments, on Wednesday. After the previous meetings in Bucharest in 2005 and Budapest 2006, the latest reunion was more concerned with technical issues, such as the labour market, infrastructure and the status of the Romanian and Hungarian ethnic minorities in the two neighbouring states. Prime Minister Ferenc Gyurcsany said that starting January 1st 2008, Romanian workers will have free access to the Hungarian labour market, adding that maintaining the restrictions was useless.
“After EU accession, when we opened the labour market to certain professions, we noticed that the number of Romanians coming to Hungary to work has gone down, instead of increasing. Given the other alternatives open to Romanians, I can state that Hungary is not one of their target countries.”
Tariceanu and Gyurcsany also discussed the intensification of cooperation in the field of road and rail infrastructure. An accord was signed for the construction of a high-speed railway linking Budapest to Bucharest and the Romanian Black Sea coastal city of Constanta. Tariceanu also dwelt on the draft Minority Law in Romania, which affects the roughly one and a half million ethnic Hungarians living here:
“I am hopeful that the parliament will eventually find a formula for merging all legislation on minority rights into one document. In this context, I want to voice the Romanian government’s desire for Hungary to develop a system allowing Romanian minorities to have their say within the Hungarian parliament. This should ideally be modelled on the Romanian example, which has ethnic minorities represented in parliament.”
The Romanian government said that as of January 1st 2008, the minimum wage will stand at 500 lei (about 145 euros) per month, up by 28%. The announcement was made by labour minister Paul Pacuraru, but the unions said they were not happy with the offer. They continue to threaten protests, including an all-out strike. Mugur Isarescu, the governor of the National Bank of Romania has voiced his concern over the pace of salary increases and has called for caution in fiscal and salary policy, all the more so as Romania is about to enter an extended election period. The governor explained that the measure is not aimed at reducing incomes, but that the salary and consumption increases must match labour productivity. Mugur Isarescu:
“We are worried that both expected increases and the social dialogue tend to exaggerate the ability of the Romanian economy to cover these salary increases without inflationist pressures.”
Isarescu drew attention to the fact that the 3.9% inflation target, put forward by the government early this year, had already been surpassed and that it would reach 5.9% by December 31st. This rise was determined by the drought this summer, reflected in higher food prices, increased prices on international oil markets and higher prices of farming products, as well as uncertainty on the international financial markets. Isarescu sounded an alarm over the financing of the balance of payments deficit, which could become more difficult, given the volatile international economic situation and the increasing foreign imbalance. During the first 8 months of 2007, Romania's current account deficit reached a record 10.2 billion euros. Here is the governor’s opinion on the evolution of the leu exchange rate:
“Our prognosis has characterised the evolution of the foreign currency market as 'volatile'. We are expecting exchange rate fluctuations, and I urge the Romanian media and society to understand that making any prediction is extremely risky. We want to avoid creating the illusion that somebody can accurately know what will happen to the exchange rate.”
The European parliament on Thursday adopted a resolution whereby it requires the 2004 community directive provisions to be observed. The directive regards the free movement of persons within the EU. Recalling that this is one of the Union's fundamental principles, the Euro MPs have established that the decree recently adopted by Italian authorities allowing for the easier expulsion of foreign nationals posing a threat to public order in Italy went against community legislation. The resolution maintains that these expulsions cannot be motivated by social or economic reasons. Expulsions cannot be collective, but individual and within very strict limits, the document states. Governments that decide on such measures must comply with European procedures, by notifying the persons concerned and ensuring their right to contest the decision in court. The resolution reaffirms the need to combat any form of racism and xenophobia, as well as national or ethnic discrimination. The document recommends the European Commission initiate a global strategy for the social inclusion of the Roma, using integration funds and community structural funds.
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