Romanian PM Calls For 25% Wage Cuts For Employees Of State-Run Cos, Including State-Owned Banks

Romanian Prime Minister Emil Boc on Wednesday called for 25% wage cuts for employees in state-owned companies, including the country’s state-owned banks, Eximbank and CEC Bank.

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The prime minister also called for a 20% cut in spending on goods and services in ministries, government agencies and state-run companies.

"I want to make it very clear that 25% wage cuts for the public will also apply to employees of state-owned companies, including Eximbank and CEC Bank," Boc told ministers during the Cabinet meeting Wednesday.

Recession-hit Romania, which is relying on a EUR20 billion IMF-led loan, has pledged to drastically cut public spending and reign in this year's budget deficit to 6.8% of GDP. Cuts include a 25% reduction of public sector salaries and 15% of pensions, unemployment and other social benefits.

Finance Minister Sebastian Vladescu said Monday the government is considering the introduction of a solidarity tax for employees in state-run companies, adding these employees' wages would not be slashed by 25%, as planned for the entire public sector.

The IMF is expected to disburse a tranche of nearly EUR0.9 billion when Romania implements its promised reforms. The country has already drawn about EUR11.5 billion from the credit line provided by the IMF, EU and the World Bank.

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