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Neither positive, nor negative notice for Government's austerity measures. Patronages and unions to sent letter to Executive to express opinion

Luni, 17 mai 2010, 19:45 English | Top News

The Economic Social Council (CES) from Romania passed a negative notice on union leader Bogdan Hossu's proposal of issuing a negative notice for he intention letter written by the Government and of rewriting it before CES voting it. Only unions voted positively (15 votes) for this proposal.
Patronages' proposals of passing a favourable notice but with the private sector's amendments have been rejected as well. Unions and patronages are to send the Government an opinion letter.

The Romanian Economic Social Council (CES) is debating the Government's intention letter to the IMF. Another letter draft is also discussed, which features the value of the pension point and differential pension tax for pensions above 1,000 lei. This would have to reduce the salary fund by 25%, so that the alterations are made after decisions taken by unionists and the main credit operator. The Work Code's chapters addressing labour force's working times, salary and collective work contracts should not change. The discussions also refer to setting up an organisation to enforce the economic re-launch measures and the government having to take responsibility for the measures.

The five main union leaders claim that although the CES notice is consultative, this time Romania's President promised to not have the agreement approved by the Government id CES is not going to pass a favourable notice.

CES Executive Office is bringing together representatives of the patronages, unions, Finance Ministry, National Council for IMM, National Commission for Prognosis etc.

Crin Antonescu - National Liberal Party (PNL)
  • We want to make you aware that we, as a political party, looking at the version that the President and the Government have presented, categorically refuse it. We want to resume discussions with the IMF.
  • We are n favour of changing the VAT quota and the flat tax.
  • The increase in fiscality is not the solution. On the other hand, cutting spending should not rely on reducing salaries, but the acquisition costs by 50% and capital spending by 20%.

Finance minister Sebastian Vladescu is invited to take part in the meeting

Sebastian Vladescu
  • The document is published and I’m sure that everyone has received it. In principle, technical things are easy. Socially and humanly, they are complicated.
  • I noted that there are major slides regarding incomes and spending
  • The public debt will go up to 36% of the GDP, likely to increase up to 40% this year. In the conditions of the agreement
  • Reducing fiscal evasion will be a firm action
  • The money from evasion will be redirected towards the social segment, to those with real needs and to attracting European funds
  • Out of the social spending, the biggest part is pensions and benefits related to the seniors
  • Adjusting the state's spending by two and a half billions would have meant a consistent reduction of the markets
  • The idea of pointing all adjustments towards material and capital costs is a big error and triggers a recession vicious circle
  • Regarding pensions, adjustments are necessary. The pensions' system, dating from 2007, has surpassed the limits of economic logics
  • If the 2007 pension had increased alongside the inflation, it would have been 400 lei. But it is 6-700 lei
  • Adjusting pensions is a medium and ling-term necessity. This year, the transfer potential is 1.7 billion euros, which in the absence of the agreement would have meant 2.3 billion euros
  • Those retiring do so with an increasing income and put pressure on the budget.

Patronages support these measures, but with some reserves. Managing the pension fund is not our business, but there is an endurance limit, some of them claimed. Pensions below 10 million old lei (1,000 RON) should not be amputated.

Romanian Patronages Confederation Alliance (ACPR) representatives, present at the CES meeting, will pass a favourable notice for the Memorandum the Romanian Government sealed with the International Monetary Fund, with the Government accepting the measures proposed by the ACPR.

  • The patronages request the pensions below 1,000 RON to not be cut

ACPR is made up by nine patronage confederations and five patronage and associative structures, including the financial-banking system, representative at a national level and internationally recognised by BusinessEurope and IOE. "Taking into consideration the extremely difficult moment facing the entire Romanian society, in the context of the actual economic crisis, ACPR will vote in favour of a new IMF Agreement only in the case of respecting certain conditions", ACPR officials say.

ACPR will not get involved with the way state-supported salaries are reduced by 25%, but asks the Government to cut 15% of the pensions only in the case of those whose pension goes above 1,000 lei.

The National Union of the Romanian Patronage announced that it will pass a favourable vote with several amendments

  • "we consider that the Government holds all the strings to make staff and salary alterations
  • it needs to foresee the blockage of any tax and revenue increase
  • we consider the pensions reductions to be illegal, anti-constitutional
  • if the Finance Ministry wished to focus more on the market economy and took re-launch measures, we would have additional funds for investments immediately within 30 - 60 days"

Industry CONPIROM confederation
  • Does not agree with the cut in pensions, especially the low ones - 1,000-1,500
  • RON. We consider this to be unacceptable
  • Fiscal evasion must be tacked and parts of it must be solved
  • Believe the Government's spending on acquisitions can be reduced
  • There should be a spending cuts programme
  • We note that there is no favourable notice from the Commissions

Bogdan Hossu
  • If there's a wish to twist the hand of he social partners, the result will be an open social conflict. It is obvious that the letter is incomplete.
  • It must be rejected, not because we are not aware of the importance of the issue, but a new text has to be written.
  • A re-launch mechanism must be created and the text does not entail it.
  • Do you want to force a vote? The unions will get up and leave. There can be no consensus today. We ask the governing side to reconsider its position.
  • We proposed a new text that should be submitted to the Economic Social Council approval.


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