Tuesday, May 26, 2009

Romania says to lay off 5 percent of rail workers

BUCHAREST, May 25 (Reuters) - Romania will axe 3,700 railway jobs this year, mostly workers close to retirement, Transport Minister Radu Berceanu said on Monday, as part of moves to restructure outdated and highly-subsidised state firms.

The layoffs follow a series of production and labour cutbacks across the country in recent months as the global financial crisis spread to eastern Europe, triggering economic recession and forcing several countries to seek outside help.

Romania's economy is expected to continue to contract in the second and third quarter after financial woes forced it to secure 20 billion euros in IMF-led loans earlier this year. "This is just the first step we are taking to solve the tough situation of Romanian railways," Berceanu told reporters after meeting trade unionists' leaders who endorsed the plan which promised full pensions for the displaced older workers.

Romania's state railways, which officials have said operate at only half the productivity of the European Union average, currently employ about 75,000 people.

Berceanu said new measures would include an assessment, on a case by case basis, of train stations and non-performing routes, coupled with additional spending cuts.

An initial restructuring plan calling for 12,000 railway workers to be laid off triggered union protests earlier this year. (Reporting by Radu Marinas; editing by Stephen Nisbet)

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