President Iohannis signs into law new public sector wage draft bill

President Klaus Iohannis signed into law the new public sector wage draft bill, stating that the coalition PSD-ALDE has to make sure that this piece of legislation will not harm the country’s financial stability.

“The ruling coalition has the obligation to ensure that the wage law produces results according to the promises, without generating imbalances in economy and negative implications for the public budget. Thus, the enforcement of the law has to be correlated with Romania’s commitments under the Stability and Growth Pact, in view of maintaining the budget deficit below 3 percent of GDP,” according to a statement of the Presidential Administration.

The president has also warned that this new law should solve the current issues in the public sector, without creating new ones. Furthermore, the Iohannis Administration said that any further increases of salaries shouldn’t be made by cutting funds from investments and infrastructure projects.

The Administration said that president Iohannis supports legislation that brings order in the way in which public sector workers are paid, but this should be done in a sustainable manner.

According to the plans of the previous government, all the wages of public sector workers will he hiked by 25 percent starting January 2018. Additional increases of salaries should come later next year for doctors and teachers, according to previous statements of government officials.

At the moment, it is not clear how the new government will enforce this law, considering that a new governing program will have to be submitted following the removal of PM Sorin Grindeanu from power.

The interim minister of finance, Viorel Stefan, said recently the wage budget in the public sector will hover around 8 percent of GDP next year, if the new law is approved.