Romania became a member of the European Union in 2007.
Active population: 9.7 million of which 25% work abroad
Employees: 4.26 million
Unemployed: 800,000, Circa 8.3%
Retired: 5.5 million
Minimum wage: 140 Euro per week
Average wage: 450 Euro per week
Minimum pension: 80 Euro per week
The crisis situation in Romania is characterised primarily by lack of financial resources for the public budget, companies and individual/ family budgets. So, why does the economy and population lack money?
An easily answered question, there is no money because:
- Romania has no banks of its own and the local revenues are not managed by Romanian banks. Many Romanian nationals are unaware that the finances are in the service of foreign and not national interests.
- Money from the very low salaries and pensions (the lowest in the EU, excluding Bulgaria) is spent on imported products. Imports account for half of GDP.
- Industrial platforms have been disabled, purportedly. In their place have emerged hyper/ supermarkets that sell imported products for which, when needed, foreign banks offer consumer loans to local people.
What is left of the local money is spent on/ for:
Distribution of electricity and gas (not production) - Water utilities - Medical products - Telecommunication services - Building materials: cement, tiles, pottery, etc.
All the above are owned or controlled by privatised foreign companies or multi-national companies.
There are no Romanian insurance companies with domestic capital so more monies move to foreign companies. Experts explain that wages are higher than productivity, which are solely bankers’ arguments. In terms of prices, Romania has practically reached and even exceeded the level of those of developed EU countries, while wages and pensions are 5-10 times lower.
In recent years, Romania has become a financial paradise for foreign banks; interest rates are higher than in the countries of origin, this has the potential to push the economy towards internal imbalances, inefficiency, speculation, and crisis. Similarly, Romania is a shopping haven, an outlet for the products of others countries.
The trade deficit rose to 23.5 billion in 2008. In 2009, decreasing to 9.73 billion Euros, and at the end of the first half of 2010, Romania was ranked eighth in the EU with a deficit of 4.7 billion Euros. The country with the lowest wages in the EU has applied the so-called toughest anti-crisis measures
In 2010, the Government was forced not only to seek loans from the World Bank, EU, International Monetary Fund, but also to take tough decisions to reduce the budget deficit:
- Cutting public sector wages by 25%
- Massive layoffs in the public sector
- Increasing VAT from 19% to 24%
- Reducing social benefits by 25%
- Introducing additional charges in the private sector (PFA, Copyright)
- Changing the pensions Law - retirement age becomes 65 for women and men alike
- The single salary law
- Eliminating subsidies in agriculture, energy,
- Changing laws governing labour relations, in favour of employers
-- by PWI Regional Reporter Romania - romania@peoplewebinternational.com
Active population: 9.7 million of which 25% work abroad
Employees: 4.26 million
Unemployed: 800,000, Circa 8.3%
Retired: 5.5 million
Minimum wage: 140 Euro per week
Average wage: 450 Euro per week
Minimum pension: 80 Euro per week
The crisis situation in Romania is characterised primarily by lack of financial resources for the public budget, companies and individual/ family budgets. So, why does the economy and population lack money?
An easily answered question, there is no money because:
- Romania has no banks of its own and the local revenues are not managed by Romanian banks. Many Romanian nationals are unaware that the finances are in the service of foreign and not national interests.
- Money from the very low salaries and pensions (the lowest in the EU, excluding Bulgaria) is spent on imported products. Imports account for half of GDP.
- Industrial platforms have been disabled, purportedly. In their place have emerged hyper/ supermarkets that sell imported products for which, when needed, foreign banks offer consumer loans to local people.
What is left of the local money is spent on/ for:
Distribution of electricity and gas (not production) - Water utilities - Medical products - Telecommunication services - Building materials: cement, tiles, pottery, etc.
All the above are owned or controlled by privatised foreign companies or multi-national companies.
There are no Romanian insurance companies with domestic capital so more monies move to foreign companies. Experts explain that wages are higher than productivity, which are solely bankers’ arguments. In terms of prices, Romania has practically reached and even exceeded the level of those of developed EU countries, while wages and pensions are 5-10 times lower.
In recent years, Romania has become a financial paradise for foreign banks; interest rates are higher than in the countries of origin, this has the potential to push the economy towards internal imbalances, inefficiency, speculation, and crisis. Similarly, Romania is a shopping haven, an outlet for the products of others countries.
The trade deficit rose to 23.5 billion in 2008. In 2009, decreasing to 9.73 billion Euros, and at the end of the first half of 2010, Romania was ranked eighth in the EU with a deficit of 4.7 billion Euros. The country with the lowest wages in the EU has applied the so-called toughest anti-crisis measures
In 2010, the Government was forced not only to seek loans from the World Bank, EU, International Monetary Fund, but also to take tough decisions to reduce the budget deficit:
- Cutting public sector wages by 25%
- Massive layoffs in the public sector
- Increasing VAT from 19% to 24%
- Reducing social benefits by 25%
- Introducing additional charges in the private sector (PFA, Copyright)
- Changing the pensions Law - retirement age becomes 65 for women and men alike
- The single salary law
- Eliminating subsidies in agriculture, energy,
- Changing laws governing labour relations, in favour of employers
-- by PWI Regional Reporter Romania - romania@peoplewebinternational.com
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