Is Romania following in the footsteps of Greece? While most of the “news” in Romania consists of headlines that serve as nothing more than “content filler”, some stories deserve discussion. Today it was announced that salaries will be cut by 25% across the board on government related employees (excluding those who would be considered protected, or rich… the elite and the politicians… think US-ish thoughts here). As well as a salary cut, the government will also be cutting pension payout by 15% in an [erroneous] attempt to curtail economic overhead. Wow…
Consider the minimum wage here of 600 ron; when the minimum wage in Greece and Italy, as another example, is much higher than this and people actually take to the streets and riot as a result of such announcements… what could the outcome be?
Attached is a snippet of an article that you can continue reading on their website, however you will have to translate it. I apologize for the rough “Google Translation”, however the point is clear:
From June 1 employees’ wages fall by 25% and 15% pension. Unemployment is reduced by 15%.
President Basescu said on Thursday that it will increase the VAT and the flat, but that from June 1 will reduce payroll by 25% from central and local government, being predictable and reduce pensions by 15%, but Taira aggressively subsidized.
Also unemployment benefits will be reduced by 15%.
Basescu said that one possibility under discussion was’ version of distrust “that cover the VAT increase from 19 to 24% and flat at 16-20%, while reducing the budget sector wages by 20%, so Romania to fall into a deficit of 6, 7 or even 8%. The second variant, called the president “legitimate option, is that the Government continued its program of” massive restructuring “expenses.Basescu said that the memorandum will be signed with the IMF at the end of the negotiations will go on this last resort.
He expressed hope that the new letter of intent with the IMF Government to be adopted Wednesday by the Government.
UPDATE: The state is like a fat man perched behind one weak, which is the real economy
“State looks like an obese man of 200 kg which was perched behind one very slight and slim, of 50 kg, which is the real economy, and huge expenditures of click here to read more…
We would Love to have discussion on the topic of Romanian Salaries here…