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BNR’s Isarescu: Wages should increase driven by the market force, not by politicians

The wages should increase according to productivity, a dramatic consequence being that they are increased by politicians and not by the market force, Mugur Isarescu, the Governor of the National Bank of Romania (BNR), said on Thursday during a conference.

“In Romania, we are facing with a series of challenges, which certainly take place not only here, but also at the level of the European Union. One of the dramatic consequences is that wages are increased by politicians and not by the market forces. More than 3 million Romanians, a significant share of the total working-age population, have left the country to settle in other EU Member States. In a natural order, wages should increase according to productivity and thus we can become competitive. Talking about infrastructure, I want to mention that this is essential to connect different regions, regions of which Romania is part. In order to have a solid economy it is important to maintain a perspective in which to implement coherent political reforms. Romania needs stable economic convergence. It is the only way we can reach our destination,” Mugur Isărescu said.

In the view of the National Bank Governor, Romania should monitor the implementation of structural reforms, which is essential to achieve convergence and sustained economic growth.

“We should work together in order to have a flexible economic environment. In other respects, we need to monitor the cyclical policies included in structural reforms. In general, structural reforms are essential to achieving convergence by ensuring sustainable economic growth and a more flexible economy to deal with asymmetric shocks and to benefit from entry into the Eurozone,” Isarescu said.

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