Wednesday, December 15, 2010

Romania state workers' wages to rise 15 in 2011

AP (BUCHAREST, Romania) Romania's prime minister said Tuesday public wages will increase 15 percent next year, six months after they were cut by one-fourth to meet demands from the International Monetary Fund.

Over the past two years, the government has cut the number of public sector jobs from 1.33 million to 1.29 million. Prime Minister Emil Boc says that means he can afford to increase wages again because he says the economy will return to growth in 2011.

Boc went to Parliament to argue for passage of his public sector wage law, which would cut bonuses and impose a hiring freeze. Opposition parties have three days to file a vote of no-confidence on the bill.

President Traian Basescu said Romania needed to borrow euro6 billion (US$8.06 billion) in 2011 to cover a budget deficit of 4.4 percent. While predicting the economy would grow by 1.5 percent next year, he said Romania still needed to rein in spending. He urged lawmakers to change wage laws, claiming that there were 1.68 million people in Romania who work but do not pay taxes at a news conference at his presidential palace.

Romania also needs to pass the 2011 budget and pension reform, without which the IMF will not disburse the next installment of a euro20 billion ($26.67 billion) loan to the country.

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