Tag: benefits

  • Law against special pensions

    Law against special pensions

    Barely one month into a year marked by local and parliamentary elections, Romanian politicians are competing in initiatives meant to please the general public. On Tuesday, the Chamber of Deputies in Bucharest held a special session in which they passed a bill scrapping the so-called special pensions, with 247 votes in favour against 21 abstentions.



    The clear score however says nothing about the heated debates that preceded the vote. The Liberals, currently in power, and the Social Democrats, who were sent into the opposition at the end of last year, accused each others of being the ones who had introduced such privileges to various professional categories in the first place. The Democratic Union of Ethnic Hungarians in Romania and the Liberal Democrats requested a postponement of the debates, whereas Save Romania Union asked for further restrictions, including a cap on pensions for magistrates.



    The final text of the bill does away with the special pensions paid to MPs, to judges and prosecutors, to court clerks and prosecutors office clerks, to certain categories of civil servants, to diplomats and to Constitutional Court members, and to airline staff. All these categories had so far received pensions that were not based on their previous contributions to pension funds, and which were generally seen as unjustified, unfair and ultimately as a slap in the face of the millions of pensioners struggling to make ends meet.



    However, the special retirement benefits to be paid to former military, police and intelligence service personnel were left untouched, and so were the benefits paid to former athletes, artists, scientists and to members of associations in the creative sector.



    The leader of the Liberal floor group, Florin Roman, said the special pension cuts would cover part of the costs entailed by a planned increase in child allowances and regular pensions. The president of Save Romania Union, Dan Barna, warned that the document contains elements that may be challenged at the Constitutional Court. He suggested instead, although with no success, a number of amendments that kept the special pensions in place for magistrates, but below a specific cap. In turn, the Social Democrats group leader Alfred Simonis, says that in case the court rules the bill unconstitutional, Parliament will operate the required amendments.



    The president of the High Court of Cassation and Justice Alina Corbu warned, shortly after the vote in the Chamber of Deputies, that the bill comes against a previous ruling by the Constitutional Court. She says the special pensions for magistrates are part of a set of guarantees underlying the independence and impartiality of the judiciary.



    Previously, the Judicial Inspection Division and various magistrate associations had also claimed that scrapping their special pensions would be a “brutal violation of the principles of independence and immovability of judges, as defined by the Constitution of Romania and by ECHR rulings.


    (translated by: Ana-Maria Popescu)

  • Social policies in the spotlight

    Social policies in the spotlight

    If the economy only grows by 4%, we
    can’t have something grow by 40%, the governor of the National Bank of Romania
    Mugur Isarescu was saying recently, referring to the planned increase in
    pensions as of September 1st. He is not the first to warn that
    Romania risks entering an area of turbulence if the budget deficit, which has
    already exceeded the 3% accepted by the European Union, deepens as a result of
    populist measures.




    The increase in pensions has been
    laid down in law by the former Social Democratic government without being
    justified economically, the current Liberal government says. The latter has in
    fact postponed until next summer the doubling of child allowances, another
    populist measure taken by the Social Democratic Party, and which was not based
    on a calculation of available resources and had not even been budgeted.
    However, the Liberal government reiterated that this year’s budget has
    allocated funds for the increase in pensions and child allowances, but
    emphasised that the decision to increase them will be taken in 6 months’ time,
    after an economic assessment. Ludovic Orban:




    Our goal is crystal clear, namely
    to increase the incomes of all Romanians, including private sector salaries,
    pensions and allowances, but underlying this increase must clearly be stable
    economic growth, not increases on paper that lead to growing inflation and that
    cannot be supported in the long run.




    The Social Democrats say that in
    less than three months, Orban’s government has cancelled the economic progress
    made earlier, and this can be seen by looking at the numbers. The former Social
    Democratic minister for labour Lia Olguta Vasilescu:




    From a deficit of 2.9% we now have
    a deficit of 4%. From a public debt level of 35% we now expect a public debt
    level of 39%. From a 3.4% inflation rate in November we now have a 4.2% inflation
    rate, while the leu-euro exchange rate has reached an unprecedented level.




    A clash between the National Liberal Party and the
    Social Democratic Party is expected in Parliament, where the Orban cabinet will
    assume collective responsibility for the bill on the return to the two-round system
    for the election of mayors. Amendments to the bill may be submitted by the 27th
    of January, and the bill itself will be debated in Parliament on the 29th.




    So far, the Social Democratic Party
    has reacted only with words to the previous cases in which the government has assumed
    collective responsibility, including in the case of the budget bill, but it
    cannot allow a bill that could damage it significantly in this summer’s local
    elections go unchallenged. As a result, the Social Democrats have decided to
    initiate a motion of no-confidence and expand it from the issue of the
    two-round system for the election of mayors to the overall performance of the
    Orban cabinet. Supported by the Democratic Union of Ethnic Hungarians in
    Romania, a party that also stands to lose from a possible change of the
    election law, the Social Democrats believe in the success of their motion.

  • Challenges Facing  the New Labour Minister

    Challenges Facing the New Labour Minister

    The new Romanian Labour Minister, the 40-year old Dragos Paslaru, an economist by trade, took office on Tuesday, just one day after being sworn in before the head of state Klaus Iohannis. The President stressed the fact that the new minister was taking over the office at a very complicated time and advised the new minister to turn salaries in the public sector into a priority of his term in office. Klaus Iohannis:



    Klaus Iohannis: “Obviously, expectations are high with regard to eliminating salary inequality in the public sector. I hope that, together with all the other stakeholders, you will find a solution that would really improve the situation in this sector.



    Dragos Paslaru, a former economic adviser to Prime Minister Dacian Ciolos, was proposed by the very PM to replace Ana Costea, who resigned last week, following protests by trade unions over the draft emergency ordinance on salaries in the public sector. In the meantime, PM Ciolos has announced that the executive carries on talks with the main stakeholders on the salary issue, with the aim of finding a feasible and acceptable solution, from both a budgetary and legal point of view.



    Another challenge for the new Labour Minister is to enforce the new provisions of the law regarding child rearing leave and benefits, which have been recently promulgated by the head of state. At the investiture ceremony, President Iohannis said that was a very important law for Romanias demographic development and called for proper implementation solutions.



    Klaus Iohannis: “I believe this is a good law, awaited for and welcome. It is a pro-active law in this field of demographic policies, and it is definitely extremely important to Romania.



    The new law eliminates the monthly child rearing benefit cap, which until recently was 760 Euro. Therefore, under the new law, mothers will get 85% of their incomes, for a period of 2 years. The parents who decide to get back to work sooner are entitled to an incentive accounting for 50% of the minimum guaranteed benefit.



    Parents who have won taxable incomes for a period of minimum 12 months in the last two years may benefit from a 2 year child rearing leave, or 3 years, if the child is disabled. The new provisions are due to come into force on July 1st, but the Finance Minister has recently said there are not enough funds to apply the law until the budget is adjusted. The National Liberal Party has hailed the promulgation of the law and has called on the new Labour Minister to identify the financial resources needed to grant child rearing benefits.