EC ready to maintain support for Romania in its efforts to legislate a new Wage Law

Commenting on Romania’s failed attempt to legislate a new Wage Law for the public sector under the Recovery and Resilience Facility (RRF), the European Commission said it “stands ready to support efforts to maintain the essence and objectives of the reform and to help the authorities identify solutions that can contribute to achieving its main objectives,” Digi24 reported.

The Commission said it understood that Romania intended to achieve this before the end of the year.

Romania lost the EUR 770 million RRF grant linked to the reform, after the Presidency announced last week that the centrist parties negotiating the draft had failed to reach an agreement. However, the Presidency’s press release also said that the objective remained to legislate the bill by the end of the year, a target that we see as overly optimistic.

The Commission’s statement, cited by Digi24, implies that there may still be some incentives for Romania if the law is eventually legislated.

Moody’s, in a comment on the significance of Romania failing to pass the Wage Law, noted that the end of the Resilience Facility would diminish the incentives for the Romanian authorities to continue their efforts in this direction.

The law is essential for demonstrating political commitment and coherence towards further fiscal consolidation, the rating agency also noted.

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