Tuesday, May 18, 2010

AP: Romanian unions reject government austerity plan


Romanian unions on Monday rejected a government austerity plan to cut public wages by one-fourth and pensions by 15 percent, calling for a compromise to prevent strikes in the public sector.

The decision taken by a council of government officials, unions and business representatives, is not binding.

But it is likely to influence Romanian President Traian Basescu's letter seeking the next installment of a euro20 billion ($25.17 billion) International Monetary Fund-led loan granted last year to help Romania through it economic crisis. Romania's economy shrank by 7.1 percent last year and may contract by as much as 0.5 percent in 2010.

Union members in the council called for the government's loan letter to be redrafted and the agreement with the IMF re-negotiated.

Cezar Coraci, chairman of an industry trade union, said: "Nobody denied we must cut down on unjustified budget expenditure, but that doesn't necessarily mean cutting salaries by 25 percent."

Unions have threatened to call a general strike by 40,000 workers on Wednesday unless the government eases its austerity plan.

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