site.btaRomanian PM Warns of Risks in 40% Public Administration Staff Cuts

Public sector wage costs in Romania rose by 10% in the first six months of the year compared to the same period last year, even though the draft budget called for a 5% reduction, Prime Minister Ilie Bolojan announced at a press conference broadcast live on the internet on Tuesday. "It has been two months since the government took office. The budget situation turned out to be much more serious than we had anticipated," the politician admitted to reporters.

He reviewed the reforms carried out so far.

"The first package adopted resolved some of the problems. The second, submitted to Parliament yesterday, reduces privileges in the public sector, namely excessive salaries and pensions. It also restores the state's ability to collect taxes from those who evade them," the Prime Minister emphasized.

Bolojan explained that the second package, which includes five bills, was supposed to be supplemented with a sixth - a reform of public administration - but it was not presented to Parliament because the coalition partners did not agree on it.

"Without its adoption, we are effectively failing to take advantage of the potential of local public administration, which is the backbone of Romanian public administration, and we are not reducing an important component of the costs that the Romanian state will no longer be able to bear in the coming years," the politician said categorically.

He illustrated with a graph what a 40% reduction in local public administration positions would mean - a figure he insisted on but which divided the coalition partners.

"There are currently 189,777 employees in local government in Romania. If the 40% reduction I am proposing is implemented, the final number would be 126,862. However, this also includes vacant positions. Thus, the effective reduction in staff positions would be 13,098, or 10%. Of a total of 3,228 administrative-territorial units, only 1,655, or half of the municipalities, will have to cut staff positions and restructure," explained Bolojan.

When asked whether he would really resign if the coalition partners failed to reach an agreement on staff cuts in the public administration and the reform was not pushed through, the Prime Minister replied:

"The coalition parties and the President of Romania must be partners of the prime minister, otherwise things will not work. When you have four parties and a minority group, it is not always easy to make decisions. We have a government program, on the basis of which I have taken responsibility. However, if agreements and understandings are not respected, it means that it is difficult to exercise your position as a prime minister."

When asked whether the planned reform of local government would lead to an increase in unemployment, Bolojan replied that the private sector in Romania has no one to hire and those who are laid off can find employment there.

"If we do not cut our bills, we will not be able to secure investments at the pace we want. The sooner these cuts are made, the more public money will be saved," he added.

Disputes within the ruling coalition over local government reform have been going on for a week now. Initially, it was proposed that the budget be reduced by 20-25%, a percentage that the Social Democratic Party agreed to, but later the prime minister announced that it would be too small to bring about real reform and proposed a cut of over 40%. As a result, the reform was postponed for two weeks, and Prime Minister Ilie Bolojan threatened to resign.