Romanian Unions Say IMF Deal Can Be Changed To Allow Only 10% Cut In Public Sector Wages

They stressed that the difference up to 25% should come from axing various incentives, purchases and services.

Cartel Alfa union federation vice-president Petru Dandea said Thursday that unionists proposed, among others, that incentives of nearly 1.3 billion lei (EUR1=RON4.1785), which usually go to the political clientele, be included among sums to be reduced until the end of the year, stressing that public sector employees can dispose of these sums as not all of them would be affected if these incentives were scrapped.

He added that the bulk of the RON1.3 billion worth incentives, namely nearly RON900 million, goes to Finance Ministry staff.

Dandea said the leaders of the country's five union federations convened to analyze the data submitted by the Finance Ministry with respect to the exact economic indicators used by the Government to establish its recent austerity plan.

According to Dandea, unionists are seeking solutions different from the ones proposed by the Government, in an attempt to prevent planned cuts in public pensions and salaries.

Dandea underscored that planned protests are still on until unionists are certain that the Government accepts their proposals to modify the Memorandum of Understanding with the International Monetary Fund. Dandea went on saying that if the Government proves inflexible and sticks to the harsh measures included in the agreement with the IMF, unionists will have no choice but to resume protests and go on full-blown strike in order to oust the Government.

"Unionists truly believe they will spot other financial resources to help reduce the budget deficit and prevent pension and salary cuts," said Dandea.

Romanian President Traian Basescu said Tuesday evening that he decided alongside Prime Minister Emil Boc that the additional letter of intent to the standby agreement with the IMF will be adopted by the Government only with the prior approval of the country's Economic and Social Council.

Basescu stressed at the time that he would be glad if the Council came up with better solutions than the ones proposed by the Government in the letter of intent to the agreement sealed with the IMF. He argued, however, that the IMF is not at all the Salvation Army and therefore, offers no gifts whatsoever.

The Economic and Social Council has 45 members, of which, 15 representatives of unionists, 15 representatives of employers' associations and 15 Government officials. The Council's approval entails the approval of three quarters of its members' votes.

Romania, which is mired in the deepest recession in at least 20 years, has announced it will slash public sector wages by 25% and lay off 70,000 state employees this year, to meet the conditions of a EUR20 billion IMF-led loan it needs to stay afloat.

The country has chosen to cut wages, pensions, subsidies and social benefits to avoid raising its main taxes, an austere plan that has prompted wide social unrest and promises of Greek-style street protests.

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