December 30, 2024 UPDATE

A roundup of local and world news

Newsroom, 30.12.2024, 20:00

GOVERNMENT On Monday, during its last meeting this year, the government of Romania passed an emergency order cutting down public sector spending in 2025. The bill agreed on by the leaders of the ruling coalition (comprising the Social Democratic Party, the National Liberal Party and the Democratic Union of Ethnic Hungarians in Romania) includes measures such as suspending public sector employment or freezing pensions and salaries of public sector employees at the 2024 level. In addition, overtime will no longer be paid and no bonuses or premiums will be granted. The government claims that these measures are aimed at reducing public spending by almost EUR 4 billion, i.e. 1% of GDP. To this end, the Cabinet has set up a department made up of experts working pro bono to increase the efficiency of the government’s work. The state budget law for next year will be passed by the government in January and sent to Parliament for endorsement in a special session.

PROTESTS Penitentiary police Monday picketed the Government headquarters in Bucharest, protesting the measures to reduce public expenses. They claim they would lose up to 30% of their salaries because of the enforcement of the new provisions. Also on Monday, several trade union and employer organisations in Romania issued statements criticising the measures designed to cut expenditure in the public system. Trade unions in the education sector are against the salary freeze, while the largest trade union federation in public administration and social assistance, Columna, complains that the order had been drafted without social dialogue. The energy sector employers federation also cites the lack of consultations, criticising the introduction of a tax on special constructions. The Romalimenta Employers’ Federation warns that the food industry is receiving another blow with the cancellation of tax facilities benefitting employees in the sector. In turn, representatives of small and medium-sized enterprises say that lowering the tax threshold for SMEs and increasing the tax on dividend will have catastrophic effects for Romanian entrepreneurs. The American Chamber of Commerce in Romania also voiced concerns about the fiscal measures adopted by the Government, which, it believes, put the business environment in a difficult situation and further affect economic predictability and investor confidence.

PRICE HIKES Romanians will be paying more for petrol and diesel as of January 1, due to a 6% rise in the fuel excises, according to a document released recently by the Finance Ministry. A litre of petrol will cost 3 Eurocents more, and diesel will have almost the same price. Excises on alcohol beverages will also grow by 4.4% as of January 1. Local taxes and duties will be adjusted to the inflation rate, but the decision in this respect is going to be made by city halls. The Bucharest General Council has decided to raise these taxes by 10.4%.

UNEMPLOYMENT The unemployment rate in Romania was 3.28% at the end of November 2024, with the total number of unemployed people reaching 261,511, the National Employment Agency announced. At the end of October, the national unemployment rate was 3.20%. Unemployment in rural areas is almost 3 times higher than in cities. The 40-49 age bracket and men have the highest share among the unemployed. Middle school graduates account for 33.56% of the total registered number of unemployed people, while those with university degrees only account for 4.56%.

BORDERS The Romanian Border Police is ready to join the Schengen area with land borders as of January 1, 2025, when border controls will be eliminated at 40 road, rail and port checkpoints. According to a statement issued by the Border Police General Inspectorate, as of next year travelling to and from other Schengen member states will be similar to a trip within the country. However, people who intend to travel to the territory of another Schengen state must have a valid travel document, namely a passport or identity card, because Romanian border police will carry out random checks, the statement also reads.

DIPLOMACY Romania’s foreign ministry Sunday night said that on December 18 the Romanian ambassador to NATO conveyed Romania’s disapproval over the distribution of a geographic atlas comprising maps featuring the so-called, ‘greater Hungary’. “The atlas is of an inflammatory nature with respect to the strategic partnership between Romania and Hungary and their capacity as NATO allies. The foreign ministry in Bucharest reiterates the view it has consistently conveyed to the Hungarian authorities, that any provoking statement and gesture is not likely to help consolidate the partnership relations between Romania and Hungary. The shared history must remain a subject for historians to study,” Bucharest says. Dismantled at the end of World War I, the so-called ‘greater Hungary’ included territories occupied by Budapest, which today belong to Romania, Slovakia, Croatia and Slovenia. (AMP)