The social implications of the crisis

Romanian sociological study looks at the effects of coronavirus pandemic on living standards in this country.

Leyla Cheamil, 27.04.2020, 14:00

It’s been about four months
since the novel coronavirus was first reported in Wuhan, China, before spreading
rapidly around the globe, disrupting the lives of people everywhere. The
pandemic is bound to end at some point, but its effects will be felt deeply.

A study conducted by the
Research Institute for Quality of Life of the Romanian Academy warns that
Romania is faced with two crises at the same time: a health crisis and an economic
crisis. The institute’s paper, entitled The pandemic and living standards. Social
protection policies, posits that unlike the health crisis, which has immediate
effects, the economic crisis has social implications that are already visible
and will continue to be so for some time. Living standards will suffer
especially once the health crisis is over or begins to pass, says the research paper,
emphasising that judging by other economic and social crises faced by Romania in
the past, it will take at least another five years for the people’s purchasing
power to recover.

The study notes that the
population’s incomes are already lower as a result of the pandemic and that the
employees on furlough will be worst hit, with more than one million employment
contracts having already been suspended. People working in informal employment,
subsistence farmers, whose number is unknown, as well as the persons who have
recently returned from abroad and who do not have an income are also expected
to be hit hard by the crisis.

Sociologists therefore
propose an increase in unemployment benefits to around 200 euros for the next three
to six months, which amounts to 75% of the net minimum wage. In the area of
social assistance, researchers propose a guaranteed minimum income of 200 euros
for the next three months, an increase in state funding for the emergency aid budgets
of the local administration in the next three months, the amendment of the social
assistance law and drafting the sectoral strategies in the social sector for
the 2021-2027 period based on the new situation.

The research paper also
notes that the International Monetary Fund expects Romania’s public deficit to
reach 8.9% of GDP, the equivalent of some 19 billion euros, and for GDP to see
a 5% drop in real terms. To help with the public deficit, the paper proposes starting
urgent talks with the International Monetary Fund and levying a solidarity tax.
It also recommends a number of policies relating to pensions and salaries, such
as cancelling or delaying the implementation of the pensions law adopted in
2019, indexing pensions based on the inflation rate, raising salaries only so
as to compensate for the inflation rate and the reintroduction of a nationwide unified
salary scheme in the local administration. (CM)