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September 26, 2021

Safe solutions are being sought for salary increases, Georgescu says

Destination for the EUR 5 bln ‘found’ in Government’s accounts yet to be decided.

Florin Georgescu, Finance Minister-Designate, yesterday said that the new government will try its best to seek solutions aimed at increasing the salaries of public sector employees and pensioners, without jeopardizing financial stability and macroeconomic balance, according to Mediafax.He ducked answering the question where the money will come from, nor would he say a word about his reservations to accept the finance minister’s post, as said by PM-designate Victor Ponta.In her turn, Mariana Campeanu, the proposed labour minister, made abiding the law and transparent and fair spending of public money as her priorities, with repairing measures first and foremost aimed at returning the 15 pc salary cuts operated in 2010 to public employees, as well as the amounts taken from pensioners. She said that the government must first be validated by Parliament, with each minister-designate to then meet with their predecessor to see “what the situation is at every ministry.”  The minister-designate said she had proposed that the former government returned the social insurance contribution in equal tranches by diminishing the amounts paid into the Health Insurance House. “We must see how much the amount is that we are to give back, whether it fills the gap or not and whether the money will be returned the way we proposed it, or a better solution is found. If we find the 5 bln euro the former government was boasting about, I don’t know where is hidden, we will look into the matter again and will make an announcement,” Mariana Campeanu also said.The labour minister-designate also showed that, unless the money was found, “a budget adjustment is in the pipeline to restore salaries and find the sources for returning the health insurance amounts”. “What I can confirm to you is we will do it,” Interim Finance Minister Bogdan Dragoi, while on Realitatea TV, Tuesday, said that the 5 bln euro found in the Ministry of Public Finance (MFP) accounts could be used to cope with potential foreign shocks and not to restore salaries. “The reserve is the warranty Romania’s protection, which will only be used if no money could be borrowed, and not for restoration,” Dragoi specified. It should be reminded that the caretaker finance minister on Monday said that the MFP accounts contain EUR 5 bln and RON 7 bln, and the pre-conditions are met for EUR 1 bln being received from the World Bank towards completion of the financial buffer. Dragoi added that while the current economic conditions allow for public sector employee salaries to return to their value before the cut, this remains a political decision nonetheless. He also said that cuts in social contributions are another issue that could be discussed, although that too is a political option.

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