In an attempt to reduce expenses, the government has so far analyzed two possibilities: a 20 percent cut in salaries, which corresponds to savings worth €2 billion in 2009, or the laying off of one fifth of civil servants, a measure with major negative consequences economically.
Considering that the memorandum signed by Romania and the European Commission states that “measures to adjust salary expenses must lead to a nominal reduction in salary expenses of at least four percent compared to their level in 2008,” without indicating a specific mechanism to effect this reduction, Business Standard made the following calculation.
Of the 52 paid weeks in a year, four percent means two weeks. In other words, to register the required level of savings, civil servants should receive ten days less of salary in 2009. This mechanism was successfully applied in times of crisis in other countries, such as Portugal and France, and also by private companies with hundreds of thousands of employees, such as British Airways.
“This is a temporary measure, which affects only the income of employees, without having an impact on the salary level,” former Minister of Finance Daniel Daianu said. “This measure would create a state of safety for civil servants. More importantly, however, is the fact that the perverse effects of laying off 20 percent of staff, such as a dramatic drop in consumption, with impact on VAT [value added tax] revenues, and a rise in loan arrears or utility invoices, would be avoided by way of such a decision,” Professor Mircea Cosea said.
