IMF: Romanian Minimum Wage Will Be Set Following Talks Btw Govt, Social Partners

A final decision on the level of the minimum wage will be made after the Romanian Government holds talks on the matter with social partners, employers’ associations and unionists, IMF mission head Jeffrey Franks told a news conference Monday.

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Franks said the International Monetary Fund respects the Government's intention to hold talks with social partners before making a final decision on the minimum wage. He added Government and IMF officials will decide on the minimum wage after the Government and social partners reach an agreement on the issue.

Romanian Prime Minister Emil Boc on Monday said the minimum wage will be increased to a level that will be set following talks with unionists, adding the country's new unitary salary law will allow a slight increase in public sector salaries in 2011, if the budget allows it.

Last week, the IMF told the Government it disagrees with increasing the minimum wage in 2011 to over 650 lei (EUR1=RON4.2771). During talks held last week with the IMF, the Government coalition leaders put forth several propositions, such as increasing the minimum wage to RON700 from RON600, lowering social contributions to 41% from 44% and reducing the flat tax rate to 12% from 16%.

Franks recently said there might be room for an increase in the minimum wage, but any decision in this respect should be carefully analyzed, as a too high increase could have negative effects.

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