February 4-9, 2018

Click here for an overview of the headline grabbing events in Romania this past week

Leyla Cheamil, 10.02.2018, 14:05

New salary scheme sparks controversy in Romania

The unified pay law and the switch in the payment of social contributions from employer to employee have caused dissatisfaction among public employees. Trade unions say peoples salaries have dropped significantly in some sectors as a result. In response, labour minister Lia Olguta Vasilescu says the purpose of the law, which passed last year, is to even things out in the public sector, where state employees used to be paid differently for doing the same job or holding the same position. Vasilescu also says the law observes a basic European principle, namely equal pay for equal work, and that bonuses have been capped because they were sometimes higher than the basic salary. On Thursday, the Romanian government took a series of measures to maintain the monthly net income at least at the same level as that recorded in December last year for IT, research and development and innovation employees, seasonal workers, employees with serious disabilities and part-time employees. The National Liberal Party, the main opposition party in Romania, plans to call for a no-confidence vote against the labour minister over the new salary law. The Liberals have also criticised the switch in the payment of social contributions from employers to employees, saying it has unsettled the salary system even more. The president of the Association of Romanian Business People, Florin Pogonaru, says all economic measures taken last year were devoid of logic. He believes 2018 will be the year when the populist measures taken by the government last year will come back to haunt it. He says the first signs of this happening is the confusion over the new salary scheme.

Romanias growth rate to slow, the European Commission estimates

The European Commission estimates that Romanias economic growth rate will slow down to 4.5% this year and to 4% next year, following an accelerated rise to 6.7% in 2017, according to the Commissions winter forecast published on Wednesday. The World Bank has recently made similar estimates regarding Romania. The National Prognosis Commission, however, this week revised its GDP forecast for this year up to 6.1%. In its report, the European Commission also notes that the situation of the labour market has improved, the unemployment rate is at a 20-year low and the net average salary has gone up by 13% in real terms. The Commission has warned, however, that the inflation rate began to increase in the second half of last year as a result of food and energy price rises. Also on Wednesday, Romanias National Bank increased the annual monetary policy interest rate from 2% to 2.25%, but maintained the current levels of minimum reserve rates for liabilities in the local currency and hard currency in the case of lending institutions. National Bank governor Mugur Isarescu expects loans in the local currency to become more expensive as a result.

The Directorate for Investigating Organised Crime and
Terrorism publishes yearly report

In its activity report for last year, the Directorate for Investigating Organised Crime and Terrorism says Islamic radicalisation has grown in recent years in Romania and calls for the terrorism law to be updated. Counter-terrorism prosecutors say, however, that Romania did not face any concrete or substantial threat last year. The report also notes that more than 2,000 kg of drugs were seized last year. Cannabis is the most trafficked drug in Romania, being brought in by road in particular from Spain and the Netherlands. Romania is still mainly a transit country in the illegal cross-border trade, being on the so-called Balkan route used chiefly for smuggling heroin, cocaine and ecstasy.

European Parliament
debates threats to the rule of law by the Romanian justice system reform

The Romanian justice system is in the spotlight of the European Union following changes to the justice laws initiated by the ruling coalition made up of the Social Democratic Party and the Alliance of Liberals and Democrats. The changes have come under criticism from the right-wing opposition, civil society and magistrates, who say they aim to place the judiciary under political control. On Wednesday, the European Parliament meeting in Strasbourg held a debate on the threats to the rule of law by the Romanian justice system reform. The European Commissioner for Justice Vera Jourova reiterated the call of the European Commission for Parliament in Bucharest to start a debate on the changes to the justice laws in line with Brussels recommendations and reach consensus on the subject. Vera Jourova said the independence of Romanias justice system and its ability to fight against corruption efficiently have been the Commissions wish and Romanias goal for years. The Social Democratic MEP Victor Bostinaru, however, echoed the views of the ruling majority in Bucharest that the European Commission doesnt know all the facts about the situation in Romania.