Delaying unpaid holiday to speed up layoffs

Reducing staff-related expenses in the public sector will be made through layoffs rather than by cuts in salaries, considering that it is already late for applying the ten-day unpaid holiday, according to the President of Cartel Alfa, Bogdan Hossu. The trade union leader added that the government can only lower salaries and pensions temporarily, “exceptionally,” with the differences to be paid out later.

“The forced holiday is no longer an option, because they came up with the idea too late. The ten days, with the approval of trade unions, should have come out of the normal holiday time, which is paid. They tried to impose this measure, which led only to tension and disagreements,” Hossu said.

The official added that, even though talks between state institutions and employee representatives to find ways to cut staff-related expenses were initiated, these were suspended since the fall of the government, and are expected to resume once a new government is appointed and a new President is elected. Officials of the Ministry of Finance said they are analyzing other possibilities for cutting back on expenses, one of them a total freeze of recruitment in the public sector. “The impossibility of applying the measure for the ten-day unpaid holiday in the public sector leads to a risk for meeting the budget deficit target, but the Minister of Public Finance is considering compensating the RON 1.6 billion,” Minister of Finance Gheorghe Pogea said last week.

On the other hand, the First Vice President of the Democratic Liberal Party (PDL), Theodor Stolojan, said that the ten-day unpaid holiday, which can no longer be granted by year-end, could attract cost-cuts from investments. “Considering that the Constitutional Court postponed the decision for the ten-day unpaid holiday measure, other solutions must be found for reducing expenses. An analysis of investments scheduled for this year will be made, and money could be transferred from investments which were scheduled but have not yet been made, in health, education, and infrastructure,” Stolojan added, quoted by the NewsIn agency.

Because the budget law was delayed, the European Commission postponed for next year a €1 billion tranche destined for Romania, while the IMF, is analyzing whether to release its third tranche of the stand-by agreement in December, worth €1.5 bln.