Romanian Govt. may freeze public sector salaries next year to limit budget spending

Romania’s Government plans to take several measures to limit budget spending and increase budget revenues next year, to keep the budget deficit under the 3% of GDP threshold, according to a letter the Finance Ministry sent to the European Commission. One of the measures that may be taken next year is freezing the public sector wages at the level in December 2018 and keeping the same value for holiday vouchers as this year, namely RON 1,450 per employee, local Mediafax reported. At the same time, the Government may postpone implementing the public sector payroll law. The Government also plans to finance part of its National Plan for Local Development with money from the European Commission (EC). On the revenues side, it plans to continue taking 90% of the profits from state-owned companies and to get about EUR 280 million from the sale of 5G licenses. Thus, the cash budget deficit is expected to go down from 2.97% of the GDP this year, to 2.58% next year, and the structural deficit from 3.17% of GDP to 2.71% of GDP. Liberal senator Florin Citu was the first to mention this official letter to the European Commission in which the Government speaks about the intention to freeze public sector wages next year. However, finance minister Eugen Teodorovici said this is only a working scenario. The Romanian Finance Ministry sent this letter to the European Commission after the EC warned the Romanian Government in May this year that it has significantly deviated from the medium-term budget deficit objective (MTO) and asked for measures to correct this issue. editor@romania-insider.com (photo source: Gov.ro)