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Romanian Labor Law Old, Rigid, Needs Amendment – Ctrl Bk Gov

Romania’s central bank governor Mugur Isarescu says an amendment of the labor law is necessary, adding it is old and rigid and was created to cope with the periods when Romania had confronted a high unemployment rate.
Romanian Labor Law Old, Rigid, Needs Amendment – Ctrl Bk Gov
26 sept. 2008, 13:50, English

"All employers are complaining about the lack of workforce. There are situations of blockage in the economic development and I believe one of the areas where the structural reform should accelerate is the labor law," Isarescu said.

The governor said there were few debates in Romania over what impact might the over-protection of the employees have on the economy.

“If we stop the employers from laying-off the surplus workforce, a decision to hire new people in order to gain from a favorable environment is much harder. The conduct to defend the employees’ interest has the opposite effect; it limits the increase in labor productivity, production and salaries," Isarescu said.

Isarescu said that a 3% unemployment rate is nothing to worry about but authorities should aim for an increase in labor productivity.

At the end of July, the unemployment rate stood at 3.8%, according to Labor National Agency ANOFM data.