Romania takes mild steps to cut expenses but expects visible impact on budget deficit

The Government of Romania drafted an emergency ordinance with several steps to restrain the budget expenditures this year, G4media.ro reported. The measures are designed to close the 1%-of-GDP gap between the full-year budget revenues as projected at this moment and the much stronger revenues included in the budget planning.

But some of the measures already prompted protests, although overall, they seem disproportionately mild compared to the target. The trade unions in education plan a general strike against a provision that prevents wage hikes while other provisions, such as the banning the public employees from receiving public pensions and wages at the same time, might be eventually dropped amid expected political pressures.

Thus, according to the provisions of the drafted emergency ordinance quoted by G4media.ro, the public institutions will take steps to keep the total payroll at the same level as it was in 2022 and will not hire to fill the vacant positions.

The overhead expenditures will be capped this year at the level they were in 2022. Public institutions, including state-owned companies (included in the general government budget), will not buy new automobiles or office equipment.

The employees in the budgetary sector, including state-owned companies part of the general government budget, will not be allowed to receive both pensions and wages simultaneously – except for some actors such as education and healthcare.

The bonus for PhD-holders of 50% of the minimum wage will be extended only if the subject of the PhD thesis is relevant to the actual position, and other bonuses will be limited. The expenditures for team-building activities will be banned in the budgetary sector this year.

The state’s representatives in the supervisory bodies of state companies will no longer be allowed to be members of more than two such boards.

(Photo source: Ungureanu Vadim/Dreamstime.com)