FinMin: Minimum wage might increase before January 1, 2019. Budgetary impact of the Pensions Law – RON 80bn in four years

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Finance Minister Eugen Teodorovici told TVR public broadcaster on Tuesday evening that the minimum wage might be increased before January 1, 2019 up to RON 2,050.

There are chances. This analysis is under way at the Finance Ministry,” Teodorovici said when asked if the minimum wage might be increased before early next year as it is currently scheduled.

However, the minister could not provide any calculation on the budget effort needed for the rise.

Teodorovici said he would have an assessment on the impact of the minimum pay rise in November, when the second budget rectification is expected.

After the rectification in November, we’ll see of the minimum wage can be increased“, he mentioned. “In finances, you are compelled to make assessments.When the Romanians’ income is at stake, you have to see where the increase could come from,” he added.

The minimum wage in Romania is currently RON 1,900, a level set early this year, when it increased from the value of RON 1,450.

Finance Minister, Eugen Teodorovici also said that the ministry has calculated the budgetary impact of the Pensions Law.

“The Pensions Law was approved by the Finance Ministry yesterday and tomorrow (on Wednesday – our note) the Government sitting will take place. We hope that, at the soonest, by the end of the year, to bring the law to parliament,” Teodorovici said for TVR 1 public television.

He added that the budgetary impact would be of RON 700 million next year, above the level estimated by the ministry, as the pension point will increase.

In the coming years, the law means a budgetary impact of RON 9 billion in 2020, of RON 29 billion in 2021 and of RON 40 billion in 2022.

“It is a very large amount. President Dragnea (Liviu Dragnea – PSD chairman, our note) said it is a challenge. I believe it is the greatest challenge,” Teodorovici said.

He added that the laws on wages and pensions have a significant impact, but as long as “we succeed to bring money to the economy, we should not worry.”

Teodorovici announced that Labour Minister, Lia Olguta Vasilescu, will reveal the principles of the new Pensions Law principle. “All the approvals are there, we are the last but one minister to give the approval. The last one is the Justice Ministry, which has given the notification,” he said.

The Pensions Law will come into force in 2022 and, until then, all the pensions should be recalculated.

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