Romania Eyes Setting Up Social Fund To Help Pensioners Cope With Austerity Measures

The same sources said that each state-run company funded from its own revenues might have to transfer 1% of its annual turnover to the fund. They added that stat-run companies were asked to come up with concrete proposition as regards cutting expenditures and salaries in the public sector and send them to the Government.

First of all, any solution meant to reduce expenditures and salaries in the public sector will be discussed and analyzed, and a decision on the setting up of the fund will be made afterwards, the sources also said.

Romania has pledged to cut public sector wages by 25% and pensions and social benefits by 15% and has also promised to fire 70,000 state employees this year, to tighten its ballooning budget deficit and meet the terms of a EUR20 billion IMF-led loan it needs to navigate the recession.

Romania’s Economic and Social Council, a body consisting of union and employers’ representatives and government officials, didn’t come to any conclusion Monday and neither endorsed nor rejected the draft letter of intent to the International Monetary Fund. Instead, union and employers’ representatives asked the Government to draft a new letter of intent and include their propositions, stressing they firmly disagree with the recently announced salary and pensions cuts.