Romania Govt: Salaries To Be Cut In State-Run Cos, Not In Cos Already Restructured

Muntean gave state-run railway company CFR as example and said CFR's budget will not be revaluated, as the company has already been restructured. Asked whether the reevaluation of budgets translates into reduced salaries for all state-owned companies, Muntean stressed that this measure is a first step in this direction.

Development and Tourism Elena Udrea on Wednesday said the Government decided the salaries of employees within state-owned companies will also be reduced. She also referred to the National Investment Company which, she stressed, has already been restructured and will no longer be subject to budget reevaluation.

People close to the talks said Tuesday that the Government will set a maximum wage ceiling for employees of state-run companies, and 70% of the sum exceeding this cap will go to a solidarity fund.

The ceiling will be significantly higher than the average wage and will probably be set at around 5,000 lei (EUR1=RON4.1835), the same sources said.

The procedure will be regulated through a Government memorandum. According to the memorandum, the shareholders and boards of state-owned companies will be empowered to request that managers transfer certain amounts to the solidarity fund. Salaries in such companies will not be cut by 25%, like in the rest of the public sector, under the Government's austerity plan.

The Government's draft law targeting to cut public spending sets that the salaries of employees within public institutions will be cut by 25%, but not the salaries of employees within self-financed state companies.

Romanian Labor Minister Mihai Seitan on Monday said the Government decided in its meeting this weekend that the representatives of Labor, Finance and Justice Ministries will have to draw up a normative act to allow the reduction of salaries within state-run companies and administrations. End-May this year, Finance Minister Sebastian Vladescu said the salaries of employees within state-owned companies will not be cut by 25%.

The Romanian Government adopted this weekend the two draft laws which make up its austerity plan, cutting public sector salaries, pensions and social welfare benefits.

The Government has pledged to bring the budget deficit to 6.8% of GDP under the terms of a EUR20 billion IMF-led rescue loan agreed last year and will seek a confidence vote in Parliament for its austerity plan.

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