Ilie Bolojan announces when the new salary law will be adopted.

Romanian Prime Minister-designate Ilie Bolojan has announced plans to hold an extraordinary session of Parliament aimed at passing five critical legislative projects necessary for implementing the National Recovery and Resilience Plan (PNRR). This initiative involves a significant financial stake, with the combined value of these laws amounting to over 3.5 billion euros. Among the proposed legislation is the new "Unitary Salary Law," which has been described as a contentious issue avoided by previous administrations.

According to Bolojan, the government must adopt these five legal frameworks to ensure Romania can access its share of the European Union's recovery funds. These include reforms such as the Urban Planning Code, regulations on conflicts of interest, career paths for public officials, and the Unitary Salary Law. The prime minister-designate emphasized the urgency of these measures, noting that they are essential for securing the country’s economic stability and growth.

The discussions around the Unitary Salary Law have sparked considerable debate. Bolojan highlighted that this law was considered a "hot potato" by previous ministers of labor, who had avoided addressing it for four years. He explained that current salaries in the public sector amount to approximately 166 billion lei annually. With inflation reaching 7% this year, there is a need to increase the salary envelope by about 12 billion lei by the end of the year. However, Bolojan noted that public sector wages already constitute 8.1% of the GDP, and this proportion cannot be increased further without risking economic instability.

To address this dilemma, Bolojan outlined two possible approaches. One option is to index public sector salaries, which would theoretically avoid controversy but result in Romania losing 1 billion euros from the PNRR funding. Alternatively, the government could introduce the Unitary Salary Law, which would allow the state to retain the funds but prevent all public employees from receiving raises. Under this scenario, higher salaries would remain frozen temporarily, while lower earners could see increases of up to 15-20%.

This approach aims to balance fiscal responsibility with social equity. Bolojan expressed hope that the proposed legislation would receive broad political support to prevent the loss of crucial EU funding. He also mentioned the possibility of conducting an audit of the public sector to determine the optimal number of employees, suggesting that reducing the workforce in certain institutions might lead to more efficient use of resources and potentially higher salaries for remaining staff.

In addition to the salary issues, Bolojan emphasized the importance of holding an extraordinary parliamentary session. He stated that he would engage with leaders of parliamentary parties to discuss the logistics of such a session, aiming to schedule it in late July. To facilitate participation, he noted that senators and deputies could vote online if they were unable to attend in person. This flexibility is intended to ensure that the legislative process remains inclusive and efficient, even under challenging circumstances.

The potential adoption of the Unitary Salary Law represents a pivotal moment in Romania’s efforts to manage its public finances responsibly while ensuring equitable treatment of public sector workers. As the government moves forward with these proposals, the focus will be on achieving consensus among political stakeholders to secure the necessary funding and implement effective reforms that benefit both the economy and society.