Public institutions blocked by protests

Huge cuts in the wages of thousands of Romanian tax officials and finance workers sparked spontaneous protests on 13 October 2010, which spread to workers in pension, health insurance and employment offices. The National Trade Union Confederation ‘Cartel Alfa’ called for a total strike by public employees and the National Trade Union Bloc expressed solidarity with them, while the Alliance of Employers’ Confederations warned the protests could harm economic stability.

Reasons for spontaneous protests

The protests began when about 400 employees of agencies run by the Ministry of Public Finance (MFP), besieged the lobbies of the ministry’s headquarters in Bucharest on 13 October 2010.

The protesters were angered that their wages had been reduced by between 40% and 70%, because of cuts in bonuses. These bonuses, introduced 15 years ago, were calculated on an individual worker’s success in gathering revenues and controlling tax evasion. However, the new Unitary Pay Law limits the amount of bonuses to a maximum of 30% of basic salary. Payment of bonuses has also been delayed now for two months.

Since 1 July 2010, because of the economic crisis, the government has also reduced the salaries of all public employees by 25%. This, with the bonus cuts, has effectively reduced these workers’ monthly earnings to about €100–€150, which makes decent living impossible, particularly for those who took out bank loans during the period of economic growth (2004–2008).

The protesters are members of two trade unions, the National Alliance of Budgetary Trade Unions (SED LEX) and the National Trade Union of Public Servants (SNFP).

The strikers remained in the ministry building all night, where they had talks with the public finance minister, and with the head of the National Agency for Tax Administration (ANAF). The talks proved unsuccessful, although the finance minister did go to seek the advice of the prime minister.

The next day the protest spread to at least 20 of the 41 county public finance departments, with strikes by about 500 employees in the public finance departments of the six districts of Bucharest, another 500 in the counties of Harghita and Hunedoara, 400 in Braşov, and another 300 each in the same departments of the counties of Bacău, Bihor, Ploieşti, Satu Mare, and a further 200 in Arad, Cluj, Galaţi and Timiş.

Reactions from the social partners

The protest on 14 October was also joined by workers in pension and health insurance offices in Bucharest and the provinces, as well as the employees of all central and local offices of the National Agency for Employment (ANOFM), workers in post and telecommunication offices, teachers, and employees in the Ministry of Transport and Infrastructure (MTI). Talks were held between ministers and union leaders who strongly supported the strikers.

Bogdan Iuliu Hossu, President of the National Trade Union Confederation ‘Cartel Alfa’ (CNS Cartel Alfa), labelled the drastic cuts in bonuses as a ‘preposterous measure’, which betrayed the government’s lack of interest in the fate of its employees. He added: ‘It is obvious that such a measure will only stimulate, once again, corruption and tax evasion.’ He called for all public servants to support their colleagues and take strike action.

The representatives of the National Trade Union Bloc (BNS) said that the spontaneous strike was the effect of the direct pressure put on public sector workers. A BNS spokesperson said: ‘These revolts are the result of a long period during which public employees have been treated with contempt by the government…The middle and top management of public institutions have continually obstructed their employees’ participation in rallies and protest movements, and today they are reaping the fruits of their own actions.’

Speaking for the employer organisations, the Alliance of Employers Confederations from Romania (ACPR) stated: ‘In the current economic context, paralysing the entire public finance sector is tantamount to blowing up any chance of returning to normality.’

ACPR believes that the protesters’ grievances could be settled by negotiations between the government, employers and trade unions.

‘The image of a country, where the finance minister is taken hostage by employees in the very public establishment managed by him, will be greatly harmed in the eyes of investors’, the ACPR representative told Mediafax.

Silence after the storm

After three days of negotiations, not attended by the SED LEX representative, who announced his resignation, the government agreed that bonuses should continue to be paid. These would be in proportion to performance criteria determined in cooperation with the trade unions, depending on location and the activity involved. This was expected to be covered by an emergency law.

An agreement on the inclusion of some bonuses in public servants’ basic salary was also reached.

Commentary

The entire union movement in Romania is now combining against the 25% wage cuts and fighting for public employees’ salaries to be reinstated to the levels of December 2009, when an employee could expect to earn, on average, a gross salary of about €640 a month. Unions also want an increase of the national minimum wage from €140 to €175.

The discussions with the International Monetary Fund (IMF) delegation revealed that the IMF disapproves of a wage rise in nominal terms of more than 14%–15% in 2011, which is less than the lost 25%, and thus, in actual fact, is not a pay rise. For 2011, the inflation target of the National Bank of Romania (BNR) is 3%.

Adding to the 25% wage cut was an 8% inflation rate in 2010, which further eroded Romanians’ purchasing power. The trade unions are well aware of this, and are already contemplating new protests.

As of 10 November, the President of Romania, Traian Băsescu, sent back to the parliament the law that approves the emergency ordinance regarding the incentives paid to public employees, arguing that is not concordant with the unitary pay law and that it generates discrimination between various groups of public employees. New protest actions are expected in response.

Luminiţa Chivu, Institute of National Economy, Romanian Academy