Thursday, July 3, 2008

Romania Govt Rejects Minimum Wage Rise

02 July 2008
Bucharest _ Romanian centrist government on Wednesday said it will not accept a rise in the minimum wage as it could hurt Bucharest’s efforts to protect economic stability.

"Such a measure is counter-productive and will lead to a consistent rise of annual inflation," Prime Minister Calin Popescu Tariceanu said at a press conference following his cabinet weekly regular meeting.

Earlier some 4,000 workers from across Romania have launched a protest demanding an 8 percent increase on the minimum wage.

"The protest signals growing unrest in the face of galloping food and fuel prices. We are asking for a minimum monthly wage of Lei 540 (€ 150),” said Bogdan Hossu, the president of the Cartel Alfa trade union. He added the workers are also asking the government to speed up pension rises and subsidise household energy bills.

Like other countries in eastern Europe, Romania is struggling to ease poverty while combating pressures from global price rises and rampant consumer spending that have taken Romanian inflation as high as 8.6 percent this year. More than six million Romanians, almost 28 percent of the country's population, live under the poverty line, according to independent surveys.

On Tuesday, Romania's ruling centrists dismissed proposals to cushion the impact of soaring food and energy costs on those hardest hit, with the opposition Social Democrat Party proposing a cut in value added tax on staple foods and in fuel taxes for farmers, and also demanding a rise in the minimum wage.

The centrist government plans to keep to a budget deficit target of 2.3 percent of gross domestic product this year and to focus spending on long-term investment in infrastructure.

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