Staff spending surged 200pc in 2005-2008, says PM Boc

Prime Minister Emil Boc told the Romanian public radio station on Thursday that staff spending in the public sector surged 200 percent in 2005-2008, which he argued was not justified by the economic growth of those times.

‘Staff spending in 2005-2008 went up 200 percent. I repeat, staff spending, that is the spending on the staff working with the Government agencies, surged 200 percent.

Did we have a 200- percent economic growth those years? Is that reflected in the economy? It is obvious that abuses were committed that spending was artificially pumped up in some areas of the state apparatus.
The overall rise in the state apparatus and public jobs in 2005-2008 was 16 percent, while public pay increased 200 percent.

And what I mean is we may have to hire where hiring is justified, where there are authorities working with the citizens and have to be operational; we may hire more there, but where hiring was conducted for the sake of hiring – and I have proved that to be the case with some agencies – we will lay off and the laid-off staff will qualify for at least one year of unemployment benefits,’ said Boc.

The prime minister also said that there will be an additional programme to retrain and change qualifications for workers and hat the business environment will get the support they need, and hiring in the time ahead will also be supported.

Boc pointed to the stand-by arrangement with the International Monetary Fund (IMF), saying that it provides for reinvested profit being exempted from taxation ‘a thing that is very dear to us and that we want to implement.’

He also mentioned that on Wednesday the Government decided, based on objective analysis, to set up a cost standard that will tell how many people are needed for a town hall, a local council, a county council, a hospital or a pre-university institution to function properly.

In connection with Romania’s relations with the European Commission, the International Monetary Fund (IMF) and the World Bank, Boc said that all the commitments pledged by Romania have so far been met.

‘In the first six months of the year, which was the first analysis tool, the macroeconomic indicators agreed upon with the IMF in terms of Government deficit, were met.

So, the 2.7-percent deficit was achieved. The Government did not overshot the target, and it is even slightly below what it could have done relative to what it negotiated with the IMF.

Consequently, the first installment from the IMF loan, 5 billion euros, went to the National Bank of Romania (BNR) and 1.5 billion euro in a loan from the European Commission, went to the Finance Ministry,’ said Boc.

He added that a revision of the economic context is currently being undergone, and that what had been agreed upon with the European Commission and the IMF, namely that economic contraction in Romania will be standing at 4 percent because of the international context and some national peculiarities resulting from the year before, will not be the same now, as the contraction should exceed 4 percent.

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