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UPDATE 1-Romanian parliament okays big wage rises for school, health workers
November 7, 2016 / 4:36 PM / a year ago

UPDATE 1-Romanian parliament okays big wage rises for school, health workers

(Adds minister, lawmaker, details)

BUCHAREST, Nov 7 (Reuters) - Romania’s parliament approved double-digit average wage rises for state employees in the education and healthcare sectors on Monday, going against government recommendations ahead of a Dec. 11 election.

The technocrat government, which has a one-year mandate and fragile parliamentary support, has calculated that the hikes and other bonuses approved on Monday would raise the public sector wage bill by 4.85 billion lei ($1.2 billion).

The bill, championed by the leftist Social Democrat Party, did not address imbalances in the public sector wage bill - such as similar staff earning vastly different pay - and did not specify a funding source.

The hikes could also prompt other state workers to demand rises, critics added.

Labour Minister Dragos Pislaru said the bill favoured those whose salaries were already higher.

“It isn’t natural to raise salaries of people in management positions by over 50 percent when our problem is the village teacher,” he told lawmakers.

Coupled with previously-agreed tax cuts, exemptions and pay rises, Monday’s hikes put the budget deficit for 2017 at risk of overshooting the European Union’s 3 percent of GDP ceiling.

The hikes could also be illegal, as under Romania’s fiscal responsibility laws any wage and pension rises cannot be approved six months before elections. The government has said it plans to challenge the wage bill at the Constitutional Court.

“The fiscal responsibility law refers to the government, not parliament,” leftist leader Liviu Dragnea told the lower house. “Nowhere in the world can a parliament be stopped from legislating.”

Dragnea also said the European Union state could afford the hikes, and that the impact would be smaller given that some of the hikes will return to the budget as taxes.

Romania posted the EU’s fastest growth rate in the second quarter, driven by booming consumption due to previous tax cuts and wage hikes.

Also on Monday, senators approved state pension hikes. The lower house has the final say and it was unclear whether it had time to approve them before the session ends and the campaign begins next week. (Reporting by Luiza Ilie; Editing by Tom Heneghan)

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