Fin Min: A 50% Hike Of State Employees’ Wages Endangers Romania’s EU Membership

“Such a measure would trigger unprecedented increases of the inflation, an acceleration of the current account deficit and a huge budget deficit, which would lead Romania into a state of economic instability, which could be also aggravated by the international crisis,” Vosganian said, adding such a decision is very unusual when all the countries in Europe and the United States are adopting measures to protect themselves from the effects of the financial crisis.

 

On Tuesday, the Romanian Parliament has adopted an ordinance that increases with 50% employees' wages in the education system. Following the announcement, other categories of state employees threatened to start a strike if they didn’t receive the same wage increase.

 

"It is clear that such a measure cannot be adopted only in education. The ones that vote such measures must understand that they practically vote the amendment for all the budget categories," Vosganian said.

 

According to Finance Ministry’s calculations, a 50% hike of all state employees would trigger a budget deficit of 7% of gross domestic product next year or the annulment of all investments established for 2009.

 

Romania has set a budget deficit ceiling of 2.3% of GDP for this year and plans to bring the gap to below 1% of GDP by 2012, ahead of its planned euro adoption in 2014.