After consultations with former ruling partners mediated by president Nicusor Dan on July 17, followed by consultations with the trade unions, the Social Democrats (PSD) are close to agreeing on the Wage Law for the budgetary sector – a milestone under the National Recovery and Resilience Plan (PNRR) with a EUR 770 million grant attached. 

“We found some problems, but they can be settled,” former labour minister Florin Manole (PSD) announced on July 18, according to Agerpres.

New discussions on the draft law will take place this week, most likely on Tuesday, July 21, between the leaders of the parties in the former governing coalition, according to the public broadcaster Radio Romania Actualitati.

The Liberals (PNL) and Save Romania Union (USR) support the initiative, while PSD conditions its vote in parliament on the project of preserving the income of public sector employees.

In addition, former labour minister Manole declared that the Social Democrats will centralize the proposals formulated by the unions, which will be discussed with coalition partners.

For its part, AUR announced that it would reject the project, considering that it does not reflect the reform promised by the executive.

The public payroll will increase by RON 12.1 billion, from RON 166 billion in 2026, according to the draft law cited by Profit.ro. After 2028, the benchmark used to calculate individual wages in the budgetary sector will increase in line with the target of cutting the payroll-to-GDP ratio by at least 1.5 percentage points during 2024-2031. 

Under the law, those earning more than the wage calculated under the new Wage Law will not have their wages cut. However, all bonuses will be reduced, as a general rule, to no more than 20% of the wage (without bonuses).

Notably, the payroll-to-GDP ratio was 9.4% in 2024 (therefore, the target 2031 ratio should be 7.9%), 8.8% in 2025, and will decrease to 8.1% this year, based on the budget plan and the GDP projections. The ratio would remain unchanged at 8.1% in 2027, based on the RON 12.1 billion increase envisaged by the draft law. 

The Ministry of Labour indicated that " this conditioning [the 1.5pp reduction of the payroll-to-GDP ratio] must be included in the law," as negotiated with the European Commission.

iulian@romania-insider.com

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