Thursday, March 18, 2010

Public workers to strike over Romania budget cuts

By Radu Marinas

BUCHAREST, March 17 (Reuters) - Romania's public workers plan a series of strikes starting this week, piling pressure on a new centrist government trying to claw its way out of recession with spending cuts. 

Hundreds of thousands of subway workers, teachers and civil servants plan to show mounting discontent at pay cuts and mass layoffs in the country's bloated administration. The strikes may hamper Bucharest's bid to rein in the budget deficit.

The three-month-old cabinet in Romania, the European Union's second poorest country, has put a vital 20 billion euro International Monetary Fund aid deal back on track by promising to cut spending, including up to 100,000 public sector job cuts.
But analysts warn a combination of social unrest and an unstable government could yet put the brake on reforms.

"The country is living dangerously ... rising protests have potential to complicate the government's job," said political analyst Cristian Patrasconiu. "Being afraid of escalating protests, they can be tempted to make concessions." 

Some 5,000 subway workers in Bucharest are due to stop work from Thursday, demanding a 20 percent pay rise in the first major action this year, which could cause indefinite traffic gridlock in the capital city of some 2.2 million people.

Meanwhile, school teachers in some poorer eastern regions have started boycotting classes at about 160 schools, protesting against a decision to reschedule overdue wage payments over a three-year period.

The move has angered powerful education unions, who are holding consultations this week to decide on whether to stage a strike. Union leader Aurel Cornea says a nationwide referendum among teachers would take place in April.

And there could be more to come, with analysts warning recently drafted plans to sack 10,000 railway staff this year could also provoke strike action.

"Social temperature is rising ... We face the danger of social explosion in Romania and thousands of impoverished workers taking to streets, like in Greece or the Baltics," said independent political analyst Bogdan Teodorescu.

"This can severely affect the country's stability, as much-needed investors look mostly at social stability indicators when pouring money into the economy."


Romania's huge state sector accounts for a third of the country's jobs, employing 1.3 million workers. Its payroll swallows 9 percent of gross domestic product and experts say the cost is twice as high as it should be.

The cabinet of Prime Minister Emil Boc has so far insisted it would not go back on fiscal reforms, including revamping the outdated pension system, which have earned IMF praise and helped Romania avoid plunging deeper into recession.

"The road of reforms should not be stopped," Boc said earlier this week after meeting trade unionists. "If we do so, we may end up in Greece's situation."

Analysts say signs of leniency have surfaced as the cabinet showed willingness to alter IMF-backed pension reform plans by considering a reduction in the retirement age for women with more than two children by up to two years, from the current 65.
The next battlefield will probably be the southeast European country's minimum wage, which unions have long demanded should be raised to 705 lei ($236) per month from the current 600 lei.

State employees, however, may well stick to their guns.

"It's good to demand your rights ... this government is not able to offer social protection," said Mariana Balan, a 43-year-old state legal adviser at a major subway station next to government headquarters. "I'm afraid I will be laid off and not be able to find a new job because of this crisis."

(Additional reporting by Ioana Patran; Editing by Charles Dick)

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