Law on pay rises is constitutional. President Iohannis to promulgate it

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Romania’s Constitutional Court ruled on Wednesday that the pay rises for the budgetary sector are constitutional, while a decision on the cut of 102 taxes was postponed for Friday.

President Klaus Iohannis announced later on Wednesday that it would promulgate it.

Deputies have passed the law on the pay rises for the budgetary sector with a large majority, 184 votes by one on November 7. The Ciolos Government and the National Liberal Party have challenged the law to the Constitutional Court, claiming it’s not legal to increase wages before elections. The law also stipulates salary increases by 15 percent for the staff in the healthcare and education public  system.

The budgetary impact announced by the Finance ministry will mount to RON 4.8 billion. However, economists think the impact will be even higher, as the rise will not only influence the 2016 budget, but it will make 2017 extremely hard, considering that expenses are already on the edge.

“The impact for 2017 is major. We are making the same mistakes as in 2008, when the budgetary deficit of 5.5 pc of the GDP, an economic growth of over 8% were the expression of a complete irresponsibility,” economic analyst Ionut Dumitru told ZF.

Labour minister Dragos Pislaru had a tough retort on the decision regarding the pay rises, saying that those who enjoy this political victory on short term are welcome to enjoy it, but they will see in the short run who will bear “the check”, be it other budgetary categories, or all employees. “He who is laughing today shall remember the past and carefully contemplate to-come,” said minister Pislaru.

He argues that “it’s more complicated” from the opportunity’s point of view.

“On one hand, I am honestly happy that the social assistance, healthcare and education will benefit of these pay rises (…) Yet, I haven’t agreed the way the monay have been allotted, although I admitted the need of better financing these social categories, but I would have preferred to be divided in an equitable manner (for instance, I would have liked rises for the social worker and not for bookkeepers and those on the top positions),” the minister explained.

Dragos Pislaru says that what upsets him the most is that by allotting RON 4.85 billion for these increases, the first two years to serious enforcement of the unitary salary law “are killed”, while other budgetary workers such as local administration, soldiers in the army and the staff in the cultural institutions, will have to wait for their incomes to rise.

The chairman of the Social Democrat Party, the one that intiated the pay rises bill, hailed the CC’s decision to declare the wages increases constitutional. Liviu Dragnea said he trusts President Iohannis to promulgate the law as soon as possible so that it should be enforced as of January 1, 2017.

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