The fiscal responsibility law bans the adoption of normative acts raising public salaries and pensions six months before elections. Romania is scheduled to hold parliamentary elections this fall.
Staff costs will be hiked by 648 million lei (EUR142.8 million), namely, 0.1% of the gross domestic product, mainly due to the increase in salaries in the public sector.
The government said that, although staff costs were hiked following an increase in public sector salaries, they continue their downward trend and are estimated at 6.7% of the GDP, while observing the law-regulated target of 7.2% of the GDP. The government also said it must breach the fiscal responsibility law in order to increase salaries in the public sector and refund pensioners a part of their social healthcare contributions.
Under the fiscal responsibility law, total expenses of the general consolidated budget, excluding financial aid from the European Commission and other donors, may be increased through budget revisions only to pay public debt and Romania’s contribution to the budget of the European Union.
Romania’s economy shrank for a second straight quarter in January through March, meaning the country is technically into recession.
In 2011, the country’s GDP increased by 2.5%, helped by a bumper harvest and improved performance in industry. (EUR1=RON4.5364)