Whether salaries and pensions can be raised in the second half depends on the official revenue projection at that point, people close to the matter told MEDIAFAX.
According to these sources, the European Commission has “unofficially” suggested the budget should be based on economic growth of 2% of the GDP and a deficit below 3%, taking into account the losses of state-owned enterprises.
The law of fiscal responsibility forbids wage raises six months before national elections, but the Government could defend a possible exemption from the law in the 2012 election year by arguing that public sector employees would only recover their salaries, not get actual raises.
The Government used an exemption from the law this summer, when general consolidated budget expenses were increased for matters other than paying the public debt service and Romania’s contribution to the European Union’s budget.
A joint mission of the International Monetary Fund, the European Commission and the World Bank will be in Bucharest until November 7 to review Romania’s progress under a EUR5.4 billion loan agreement signed in April. The talks with Romanian authorities will focus on next year’s state budget and restructuring state-owned enterprises.
Government sources said last week that the negotiations on the 2012 state budget will start from a forecast for economic growth of 2.3-2.5% and a budget deficit of 3% of the GDP.
Prime Minister Emil Boc has said that the budget will be grounded on rational policies and a reduction of social security contributions is very unlikely, while a wage raise in the public sector will depend on the economy’s growth.
The current official economic growth forecast is 3.5-4%, but it is expected to be revised downward during the evaluation mission.
Last year, the Government decided to reduce salaries in the public sector by 25%, as of July. In January 2011, the base salaries were raised by 15% compared to October 2010, meaning they are currently 13.75% lower than in June 2010.
Boc initially announced the salary cut would be recouped in its entirety next year, but later explained that it depends on budgetary resources, so no promises can be made unless the economy is seen growing by 3.5%.
As for pensions, the law says they must be raised next year by 100% compared to inflation and 50% of the gross average salary raise.