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Romania’s budget holders, the fewest in the EU, but the most expensive

In February this year, the number of state employees rose to 1,253,454, after the number of positions held in public institutions and authorities in December last year had reached 1,249,624. The number of public sector employees had also increased by about 4,000 employees in November. Between November 2019 and December 2020, when the Liberals ruled alone, the number of public servants increased by about 14,000. Amid the increase in the number of this category of employees in a time of crisis, when state spending has risen sharply and deficits have exploded, the question is obviously whether Romania can afford to pay 1.25 million employees in the central government and local.

Between December 2020 and February 2021, most jobs were made at the Ministry of National Defense, the number of staff increasing from 73,805 to 77,087. Surprisingly, at the same time the number of employees in the Ministry of Internal Affairs has decreased by about 2,000 people, from 126,481 to 124,882, given that this ministry is actively engaged in the fight against COVID, and police unions have long complained about the lack of personal. Also, at the level of the Ministry of Health, employment did not increase, remaining approximately equal during this period, 18,322 people. Instead, there is an increase in medical staff in the health network belonging to local authorities, from 138,167 to 140,705.

In 2019, public employees took 9.8% of GDP

In 2019, the number of state employees rose from 1.21 million to 1.24 million, and salary expenditures reached 102 billion lei, according to data from the Ministry of Finance. Thus, the salary envelope came to represent 9.8% of GDP, which made Romania allocate the most funds for the payment of salaries in the budget sector from revenues collected from taxes and duties, the percentage approaching 34.

In 2020 we returned to the years of the previous crisis

On the expenditure side, public sector salaries increased by 7.5% in 2020 and amounted to 110 billion lei. This meant that the amount allocated to salaries last year represented 10.6% of GDP and 38% of the consolidated general budget revenues. Basically, last year Romania went back in time, during the crisis of 2008-2010. At that time, the salary envelope reached 10% of GDP, and the International Monetary Fund asks the Government to reduce it by 7% of GDP. Now, a new crisis catches us with a wage envelope of 10% of GDP, and this will be increasingly difficult to bear against the background of uncertainties related to the duration of the pandemic of an economy like Romania marked, however, by major imbalances.

Evolution of the number of public employees (million people)

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2016 1,19

2017 1,20

2018 1,19

2019 1,23

2020 1,24

The government has no choice: either cut salaries or layoffs

However, a comparative analysis with the rest of the European Union shows that Romania has the lowest number of employees per thousand inhabitants, only 62 at the level of 2019. In reality, Romania’s problem is that it does not produce enough to afford to keeps on very high salaries, compared to the private environment, over 1.25 million public servants. We are talking about a million employees, many of them employed on the well-known system of files and relationships or on political channels, never evaluated and who have benefited in recent years from substantial salary increases unrelated to performance. The government will soon have a choice: either cut the salaries of public employees, or move to layoffs. Without the adoption of one of these measures, the state will continue its triumphant march towards a total disaster. He will have to borrow to pay interest-bearing wages that will rise amid the economic crisis, the end of which no one can see now. For the current ruling coalition, formed and pastored by President Iohannis, cutting salaries or taking on a redundancy program should not raise major social conscience issues, even in a time of crisis, because the slogan “we have too many budget holders” he was trumpeted from morning till night in the election campaign.

No. of employment in the private and budgetary sector per 1,000 inhabitants in 2019

Private Budget Country

EU 27 290 109

Sweden 314 168

Denmark 329 156

Luxembourg 565 147

The Netherlands 317 146

Finland 287 138

Germany 859 136

Belgium 225 130

France 256 124

Austria 333 119

Ireland 277 119

Lithuania 325 114

Malta 326 111

Estonia 332 110

Hungary 346 102

Portugal 320 99

Latvia 318 96

Spain 277 95

Czech Republic 347 94

Slovenia 315 93

Croatia 269 92

Cyprus 352 90

Slovakia 301 89

Greece 188 88

Poland 258 87

Bulgaria 275 80

Italy 243 80

Romania 278 62

Eurostat source

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