Romanian Govt Plans To Propose Wage Freeze To Social Partners – Sources

"This moratorium is necessary, because the government needs to act rationally, much like the private sector. The government must maintain a constant economic balance,” the sources said.

Romania’s ruling coalition and government has discussed freezing wages for six months as a working variant, but such a decision will only be made after consultations with unions.

Romanian President Traian Basescu said Tuesday on public radio that he won’t react negatively if the government reaches an agreement with unions and freezes salaries and pensions for six months to use public money to salvage the economy.

"I won’t react negatively if the government reaches an agreement with unions to freeze salaries and pensions for six months, to see what happens (with the economy – e.n.),” Basescu said.

He added that, in his opinion, the priorities are directing resources into works that create jobs, the payment of debts the government has to economic operators and the reduction of bureaucracy, which is “suffocating and inefficient".

The head of union confederation "Cartel Alfa", Bogdan Hossu, told MEDIAFAX that it’s impossible to freeze salaries now, because that would deepen the crisis and would implicitly lead to lower domestic consumption.

The idea of freezing wages and pensions for six months surfaces a day before the government and unions hold final talks on the 2009 state budget draft.

Asked whether the idea was discussed with social partners at the Ministry of Finance over the past two weeks, the head of the “Sed Lex” union, Vasile Marica, said there were no talks on this proposition.