According to the Finance Ministry, data show that the number of public sector employees has dropped in the past three years from 1.4 million to 1.2 million, and that most jobs were cut from the central public administration, i.e. from ministries and other institutions such as the Parliament, the Presidential Administration, the General Secretariat of the Government and the Court of Accounts.
“Perhaps the number of public sector employees is not so large in proportion to Romania’s population, but if you consider budget revenues or the quality of services provided, the number is large. The rule of hiring one person for 7 who leave has brought short term savings to the budget, but in the long run this policy is profoundly damaging because highly performing employees will leave the system and the administration will be left with those who cannot get jobs elsewhere,” said Ionut Dumitru, president of the Fiscal Council, an independent body of experts in fiscal and budget policies.
The state has kept its commitment to the IMF by cutting the number of public sector employees, but a ZF analysis reveals that the restructuring was done through retirement (three quarters of the 200,000 public sector employees that left the system in fact went into retirement) and by freezing new hiring (the rule of hiring one person for seven who leave is still valid).
“The number of public administration employees continues to be much too high in proportion to the total number of employees (4.2 million i.e.) and to the European average. In order to be able to boost the wages of public sector employees and to increase the minimum wage, authorities must speed up the restructuring,” believes Laurian Lungu, managing partner at Macroanalitica, a provider of macroeconomic analyses.
Higher spending budgets in 2012
Personnel spending fell by just 1.8% in 2012, from 40.5 billion lei (EUR9.25 billion) to RON39.8 billion, although the number of public sector employees fell by over 5% in the last year. Ten of the Government’s 17 ministries will have up to 32% higher spending budgets in 2012, according to the draft budget approved for this year. (EUR1=RON4.3794)
(English version by Daniela Stoican)