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September 24, 2021
ECONOMY FINANCE&BANKING POLITICS

Lower Chamber adopts salary law in decisive vote

The Lower Chamber adopted the salary bill on Wednesday, in a decisive vote, with 188 votes in favour, 28 against and 47 abstentions.

The bill will next go to the Romanian President for promulgation in case it is not challenged at the Constitutional Court. Nevertheless, USR announced on Tuesday evening, after the adoption of the Lower Chamber’s Labour Committee report on the bill, that it plans to notify the CCR about the salary bill, stating that its impact on the budget is still not known and that the members of Government are “improvising” because they do not know it.

“We’ll definitely do this (collect signatures – editor’s note). Today we’ve asked our jurists to collect all reasons this law is unconstitutional. (…) We had a public debate with the trade unions on the first form of the bill, and even since then both the trade unions and we said that this law is unconstitutional for several reasons. One, the main one, is that if we look at the bill even now, it says it doesn’t have a budgetary impact this year and the budget impact in the next four years is not mentioned at all. In fact, the Government has no clue and improvises in what concerns this bill’s budgetary impact,” USR Lower Chamber lawmaker Cristian Seidler stated at the end of the Labour Committee debates on the salary bill.

On May 29th, President Klaus Iohannis said the hope that he might ask for the public sector salary bill to be modified is “a bit out of place”, considering that the bill is a project undertaken by the PSD, which will be held “fully and definitely” accountable for this bill.

“The law is included in the governing platform of PSD, which said from the start that it wants this law. PSD holds the majority in Parliament, has the Government, it’s a law for which its initiator – namely PSD – will be held fully and definitively accountable. It’s good not to forget this aspect. The expectation that I should modify something in this law seems to me a bit out of place,” Klaus Iohannis said, adding that he will make more comments on the bill when it arrives for promulgation.

Iohannis warned that the possibility of asking for the re-examination of the salary law does not guarantee that Parliament will accept his request. “Even if I were to send a law back to Parliament, if those who want the law to remain as it is, that’s how it’s going to remain,” the President said.

 

Dragnea at plenary meeting: I apologise the Finance Minister isn’t here to endorse the salary law; it would’ve been good for the Premier to come too

 

PSD President Liviu Dragnea apologised on Wednesday, within the Lower Chamber’s plenum, for the fact that Finance Minister Viorel Stefan did not take part in the debates in order to endorse the salary bill, adding that Premier Grindeanu’s presence would have been desirable too.

“The fact that the Finance Minister did not come to Parliament to support this law, despite having time to do so, is a problem. I have the political strength to take responsibility and apologise, as PSD President, that a member of Government who should have been here today hasn’t showed up. It’s a problem we will deal with within, considering that the group leader also took the commitment that the Finance Minister would come here to back the law. It would have been good for the Premier to come too. It’s maybe the most important law this year,” Liviu Dragnea stated after the salary bill was voted.

Dragnea also referred to the accusations levelled by the Opposition. “It’s a law that will make history. I’ve carefully listened to the whole deceitful campaign that sought to misrepresent the meaning and the content of the law. It’s for the first time when a law that hikes the Romanians’ incomes is presented as a bad thing, and [the claim is made] that if salaries are growing they are in fact slumping. Of course, arithmetically it’s very difficult to explain this, but if you have a lot of nerve you can do it,” the PSD President said.

Dragnea’s speech was followed by a brief statement from PNL Lower Chamber lawmaker Victor Paul Dobre, who called Viorel Stefan a poor communicator and claimed his absence from the proceedings shows that he does not endorse the law. “Mr Dragnea has confirmed that he disagrees with the law,” Dobre said.

Liviu Dragnea then asked the chairman of the meeting for the right to respond to Dobre’s statement.

“Mr Victor Paul Dobre, we’ve known each other for very many years. I have grey hair, I don’t know why you don’t, but how can you say things I didn’t say? Even if he is from Galati, your county, I didn’t say Viorel Stefan doesn’t endorse this law. (…) Just like Premier Grindeanu, he said he endorses this law via the Government’s favourable report. It would also be illegal for him not to endorse it, because it’s included in the governing platform which is a law he must observe. If you have other information, we are prepared, he should express a different stance, of non-endorsement of the law, and we’ll act politically. From what we know, the Government, as a whole, endorses this law because there is financial support, but the fact that the Finance Minister was not present here today, putting the group leader in an uncomfortable position, after he promised within the Standing Bureau to be present, it’s something that will be discussed, but not in Parliament,” Dragnea said.

The Finance Minister’s and Premier Grindeanu’s absence was criticised by PNL’s Victor Paul Dobre since the start of the plenary meeting in which the salary law was adopted. Meeting Chairman Florin Iordache (PSD) responded by telling the PNL lawmaker that the Premier and the Finance Minister are on a state visit to France. However, the Premier was at the Palace of Parliament where he was taking part in a forum.

“PNL has twice demanded the Finance Minister’s presence at a debate on the sustainability of this law. The PSD majority obstructed us. We demanded the Premier’s presence for the same thing. Today, during such an important debate, both the Premier and the Finance Minister are absent. I believe at such a debate it’s necessary for the Government’s point of view to be presented and I believe the Labour Minister should answer two questions: whether this law is sustainable and the reasons why its implementation was postponed in relation to the governing platform,” PNL’s Victor Paul Dobre stated.

Meeting Chairman Florin Iordache responded by saying neither the Premier nor the Finance Minister are in the country. “The Premier and the Finance Minister are on an official visit to France,” Florin Iordache said.

Victor Paul Dobre contradicted him.

“The Premier is in the country, he’s taking part in a forum. I believe the Finance Minister is around here too. The Premier and the Finance Minister avoiding to be present in Parliament at this debate is a confirmation of the reserves we have concerning the sustainability of this law,” Dobre told Iordache.

 

PSD’s Dragnea: Unified wage law – a major step towards European average wage, despite attempts to hinder it

 

The unified wage law represents an important step towards Romania’s real integration into the EU and will pave the way to a more efficient remuneration system in the public sector and a net increase in the Romanians’ earnings, Chairman of the Social Democratic Party (PSD) Liviu Dragnea said on Wednesday in the Lower Chamber’s plenary sitting.

“The unified wage law represents an important step towards Romania’s real integration into the EU that will render efficient the remuneration system in the public sector and will result in a net increase in the Romanians’ earnings. It is a major step towards the European average wage and the integration with the euro zone,” Dragnea said in his capacity as initiator of the wage bill.

He added that working out this piece of legislation was not simple at all.

“Unfortunately, at some point the government’s political will to get things done was not strong enough. I think the effort of Parliament, of all MPs has counted the most, and I am convinced that the adoption of this law will increase the legislative prestige even if some of us are unaware of this now,” Dragnea added.

According to the PSD leader, the drafting of the law has come against certain attempts, “some of them coordinated”, to hinder its adoption.

“Beyond the absolutely necessary public debate and criticism, we have faced movements, some of them coordinated, attempting to prevent the adoption of this law. I am glad we succeeded to overcome these obstacles, for Parliament to be able to adopt such an important law,” Dragnea mentioned.

 

PM Grindeanu: Unified wage law voted in Chamber supported by Government, financial resource exists

 

The unified wage law submitted to the Lower Chamber is supported by the Government, including with respect to the budget impact of 76 billion lei calculated for 2018, Prime Minister Sorin Grindeanu stated on Wednesday.

“I am telling you, broadly, about what is now probably the number 1 public debate – the pay law – and which today I hope will pass the Lower Chamber, which is the decisive Chamber. The law has passed the Senate, it was granted the vote. Clearly, and yesterday (Tuesday – ed.n.) I had a discussion with the Finance Minister, the 76 billion part, roughly, for next year, is sustainable, because otherwise we would have been as straightforward as possible in saying: No, it is not sustainable,” argued Sorin Grindeanu, during an event dedicated to dialogue with Romanian investors – the “Romanian Capital Forum”.

The premier added that “everything the Government has assumed through positive opinion is sustainable.”

“The form that was adopted yesterday (Tuesday – ed.n) within the Labor Committee, this form of the unified wage law, is upheld by the Government. I say it as directly, frankly and without hesitation as possible. We have the financial resource and we will have it next year to support this unified wage law,” the Prime Minister also affirmed.

 

LabMin  Vasilescu: Phased-in public sector wage rise of 56pct until 2020

 

The unified wage law provides for a phased-in rise of 56 percent in public sector wages within an envelope of 32 billion lei by 2020 and of 43 billion lei by 2022, Minister of Labor and Social Justice Lia Olguta Vasilescu on Wednesday told the Chamber of Deputies plenary.

“The law is in line with the program approved by the Parliament of Romania and provides for a phased-in increase of public sector wages by 56 percent within a budget envelope of 32 billion lei until 2020 and of 43 billion lei by 2022. At the base of the salary pyramid, the rises are in excess of 100 percent and can be as high as 300 percent, like in the case of Defence, but they are less at the top, where some salaries were so high that the disproportion would have been impossible to correct even at the horizon of 2022,” said Lia Olguta Vasilescu.

According to the Labor Minister, salary rises in the public sector have already begun this year, as 6 billion lei have been earmarked for this purpose, and another 10 billion lei will be allocated next year.

“The share of wages to be trimmed is less than 3 percent – and this as a result of a host of amendments that were accepted by the Committee; many of the amendments referred to the increase of coefficients so that salaries were adjusted, for management positions included. Wage rises have been enforced this year – as my colleague, Mr. Solomon, said – for several categories of public employees: 15 percent for Health and Education; 20 percent for Administration; 50 percent for Culture; 20 percent for Environmental Agencies, Environmental Guards, Consumer Protection Office staff, SMEs, so one cannot say that this law, or the government’s version for it is aimed only at increasing the wages of the dignitaries. These salaries simply increase because they are on a grid assigned to the Local Public Administration and no separation could be done because everybody collecting benefits is on the same grid. But it’s inappropriate to say that the wages of the dignitaries are rising, because I want you to know that the pays of officials at the top of the pyramid, for instance the ministers, the President of Romania, the leaders of the Chambers of Deputies and the Senate, are decreasing,” the Labour Minister said.

On Tuesday, Olguta Vasilescu said that the Labour Ministry had calculated a pay law impact of 75 billion lei by the end of 2018, but had to redo the calculations to keep within the wage envelope set forth by the Finance Ministry.

“As of 1 January 2018, there will be a 25 percent blanket increase for all public sector employees, education and health included. After that, the second rise would be for the health care sector, that is directly pinpointed in the 2022 grid, and there would be another increase of 20 percent in education, which, combined with 25 percent results in an aggregate 50 percent rise,” the Labour Minister said in Parliament.

According to the cited source, 80 amendments cleared the Senate and another 100 amendments – the Lower Chamber.

Separately, Finance Minister Viorel Stefan explained on Tuesday that the impact of the unified wage law will be 8.6 percent of GDP in 2018.

“As of January 1, 2018, we enforce a 25 percent salary increase for everybody, and as of March 1, 2018, we achieve our goal of fully ensuring the 50 percent growth in education and healthcare. The effect is a wage envelope of 75 billion lei, which accounts for 8.6 percent of GDP. This is the target we have been pursuing. I would have liked that to be closer to 8 percent, but anything between 8 and 9 percent is sustainable,” said Stefan.

 

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