The state far behind private sector for anti-crisis measures

Unlike the authorities, private companies anticipated the economic downturn much sooner, and changed their strategies accordingly - they laid off some 170,000 employees, cut salaries on average by one fifth, froze recruitment, put off investments, began saving, and lent money to the state. Actually, companies that had contracts with the state were the first to face liquidity shortages and were forced to resort to massive cost cuts.

A recent study by the Hewitt Associates consultancy company indicated that 41 percent of private companies lowered their salary funds, while 46 percent maintained the same level, and only 13 percent operated increases. One of the first solutions adopted by enterprises to remain afloat was a freezing of recruitment intentions, for which more than half of private employers opted. Over half a million unemployed were registered with the National Employment Agency (ANOFM) at the end of July, which raised the jobless rate to 6.3 percent, a record high in the past five years. However, the number of unemployed is much higher, considering that many are not officially registered. Official statistics indicate that there are three times more unemployed coming from the private environment than from the public sector.

The leaders of large trade unions think differently about forcing civil servants to take an unpaid holiday, suggested by the government. “This is a poorly thought out measure. By sending people on holiday, some institutions may no longer function, employees will be forced to work overtime, but unpaid voluntary work is a better solution,” the President of the National Trade Union Block (BNS), Dumitru Costin, said. He added that his organization represents the interests of 30,000 civil servants, most in public administration, culture, and the Romanian Post Office, generally institutions with personnel deficits. Measures taken by private companies resulted in an increase in their accounts by 13.5 percent in the first six months, according to the National Bank of Romania (BNR). Not applying similar measures in the public sector has led to a widening budget deficit, to almost 10 percent in this year’s second quarter.

Civil servants are unhappy about the forced holiday option, while employees in the private environment are accepting all the measures decided upon by their employers, hoping to hold on to their jobs. Trade unions, which represent the interests of the private environment more than those of the public sector, are siding with civil servants, and accuse the authorities of saving money at the expense of employees, instead of plugging the waste of public funds.