Romania’s Minimum Wage Hike To Over RON705 After 2010 Depends On Further Staff Cuts

The provision is among the 39 amendments accepted in the unitary pay law.

In 2010, salaries, bonuses and monthly indemnities will be set without using the wage quotients stipulated in the annexes of the unitary pay law.

„In 2010, only salaries, bonuses and indemnities below RON705 per month will be hiked, without exceeding this value,” according to recent amendments.

The Government changed the annual targets for staff expenses in GDP until 2015, by slightly increasing the ceilings as of 2011, as stipulated in the draft unitary pay law for which the Government plans to assume responsibility before Parliament.

Staff expenses in GDP will be gradually cut to 8.70% in 2010 and 8.16% in 2011, respectively, compared with 9.40% in 2009.

The government also upped the annual targets for staff expenses for the upcoming years, namely 7.88% in 2012 (from 7.30% set in the initial draft law), 7.58% in 2013 (from 6.70%), 7.34% in 2014 (from 6.30%) and 7% in 2015 and the following years (from 6%).

The Government also decided to lower staff expenses in GDP forecast until 2015, by one percentage, to reach 7% of GDP over the next six years, from 9.4% of GDP, and not 6% of GDP, as stipulated in the current draft unitary pay law.

In August this year, Jeffrey Franks, head of the IMF mission to Romania, said Romania’s budget spending on wages in the public sector will be lowered by an annual 0.5% of GDP starting 2010, to end below 6% of GDP in the next four to five years.

Franks also said at the time that Romania’s spending on wages in the public sector have reached 9% of GDP from 7.5% of GDP and the IMF sees decreases of 0.5% of GDP per year in the next four to five years, until wage expenses reach less than 6% of GDP.