IMF May OK Wage Adjustment To Inflation If Romania Adopts Unitary Pay Law

According to the sources, IMF wants a clear engagement of the government that salaries in the budgetary system will no longer be exageratedlly increased, like in the previous years.

 

Education Minister Ecaterina Andronescu said Tuesday she would support the law on a 33.6% increase of teachers’ salaries, especially that teachers’ salaries should increase, according to a recent World Bank report.

 

Still, Government and trade unions agreed that the 5% salary increase in 2009, namely 3% on April 1 and 2% on October 1 would be renegotiated after April 15, when the Finance Ministry would have all the data on the first quarter budget.

 

An IMF mission is currently in Romania to hold discussions on a potential IMF program for Romania, regarding a multilateral financing package, to be supported by the European Union and the World Bank, among other international financial institutions.

 

The talks target the 2009 budget and the correct sizing of scheduled revenues and expenses.

 

Romania’s budget is based on a forecasted economic growth of 2.5%, a budget deficit of 2% of the GDP, an inflation rate of 5% and a GDP of 579 billion lei (EUR1=RON4.2817).

 

By April 15, the government plans to start the talks on drawing up an unitary pay law for the personnel in the budgetary system. At the same time, bonuses and financial incentives, others than stipulated in the Labor Code, will be cut or eliminated.