Romanian Pres OKs 50% Wage Hike For Education System Employees -2-

Early October, the Romanian Parliament adopted a 50% wage increase for education system employees. Following the decision, the Government contested the law at the Romanian Constitutional Court, but the Court decided the law was constitutional.

Mid-October, Tariceanu said such an increase cannot be supported financially and would trigger a major crisis in the Romanian economy.

Romanian analysts polled by Mediafax earlier in October said that, if the law goes through, the salary increase for education system employees would trigger an avalanche of wage hike requests from all other sectors, including the private one.

Romania’s Economy and Finance Minister Varujan Vosganian said Wednesday that a 50% salary increase for teachers, as recently approved by Parliament, would require funds of RON4.2 billion, or 0.74% of the estimated gross domestic product for 2009.

In his opinion, this increase can only be ensured by widening the budget deficit or restricting investments in the education sector.

According to the Finance Ministry’s calculations, a 50% wage hike for all state employees would trigger a budget deficit of 4.2% of gross domestic product next year or the annulment of all investments established for 2009.