The Parliament approved on Wednesday the new unitary pay law, but the evolution of the bill from initiation and communication stages to the final vote is not reassuring at all for the taxpayer.
The proof stays not only in the actual timetable assumed by the Government for increasing the wages, which requires the legal compliance guarantee, but also (or especially) the experience:
Between 2012 and 2016, Romania paid no less than 10.1 billion lei (about EUR 2.25 billion) to employees who won in court compensations for the state’s failure to meet legal requirements on wages: legal provisions approved by the same state.
Only in 2016, the state paid enforcement orders amounted to 4.1 billion lei – or about EUR 900 million (nine hundred million).
The data that we use below is based on the figures and summaries of the National Institute of Statistics, in conjunction with Eurostat – with an essential clarification: these billions have actually been paid, are in the process of payment and will continue to be paid to all sort of state employee categories, besides the current salaries.
Concrete money: How much it costs, in fact, this law game made by a bunch of irresponsible legislators
The first (first!) article with which cursdeguvernare.ro has been launched had exactly this topic: at the end of 2010, the state had to make payments, related to the enforcement orders, to employees who won their money rights in court, of not less than one billion euro. (LINK-HERE to the article and the explanations from that time).
At that time, it was about the same wage promises and improvisations which the previous governments had made in the election years and which they could not honour after they came to power.
Since then, though, some very spectacular events have taken place, so the current situation, in 2017, looks like this:
*, From 2011 to 2016, state employees acquired rights in court amounted to 13.9 billion lei (EUR 3 billion)
*, The data from INS DOES NOT show (nor would it – and Eurostat even less would) the enforcement orders of 2017.
But it is enough to say that only in 2016 there have been cases won worth 3.8 billion lei (EUR 840 million) – including under Law 85/2016 on the salaries in the education field.
*, only in 2011, there have been rights acquired in court worth 6.4 billion lei (EUR 1.42 billion). And because it was during a crisis and the budget did not bear such payments (given that Romania was borrowing under difficult and expensive conditions), Boc government initiated a law for spreading the payments over several years.
* The total amount won in court between 2011 and 2016 was 13.9 billion – without counting what comes from behind for 2017.
What and how much has been paid
And the payments have been actually made – the amounts won in court added to the deficit and were a priority, as it was normal: enforcement of judgments.
So:
*, From 2012 to 2016, 10.1 billion lei (EUR 2.25 billion) have been paid
*, For 2017, the budget allocation is 383 million lei
*, The highest amount has been paid in 2015, namely 4.1 billion lei (about EUR 900 million)
*, 4 billion lei were also paid one year before, in 2014
*, In 2016, 900 million have been paid – money also added to the deficit
*, 3,5 billion lei (EUR 770 million) are still to be paid. They will add to the deficit of the coming years.
Responsible ones – with names and physiognomies
We were writing above that since 2010 (when cursdeguvernare.ro was warning on the first billion of euros lost on salaries won by state employees in court) until today, there were some notable events.
The main notable event was the appeal by the state employees in court on the non-application of the wage increases that had no basis and have been granted by law in the 2008 election year.
Liable people
The source of that evil is now in power:
- -, the Prime Minister at that moment, Calin Popescu Tariceanu, survived in the government with the inexplicit support from PSD:
- -, the government of Mr. Tariceanu initiated the salary and pension increases (up to 50%) for 2009 in the 2008 election year. The initiative has followed an almost identical mechanism as the one that the current political majority used in recent months (when the administration, analysts, media were making calculations for doubling or, in the case of doctors, tripling the salaries).
Later on, the situation took a grotesque turn: the ministers who had started the measures entered the Parliament (now in the capacity of MPs) where they voted against their own measures: the polls showed that a PNL (Tariceanu) -PSD government could be established and the initiators became scared that they might have to implement themselves the budgets with the salary increases.
But it was an election year, so the increases passed and became law.
– In 2009, the crisis broke out, despite the assurances that the President at that moment (Traian Basescu) and the government (Emil Boc) gave that Romania is safe.
– The state did not have money to comply with the law. But as the 25% wage decrease applied a year later in the public sector has been declared constitutional, the state employees presented themselves in court, not for the 25% cut but the increases granted by the Parliament with an irresponsible election enthusiasm: they were a benefit won by law.
It also helped that the magistrates were in the same situation as the complainants.
– in 2011, there were the first cases won by the state employees. They suddenly appeared in full crisis: 6.4 billion lei
– in 2012, payments and their splitting on installments started up to the figures presented above
Physiognomies
Increasing the salaries based on unfair pledges or without any realistic and responsible impact study behind had several names: from the common „increase” to „reunification” to „political commitment” to „government program”.
Decision-makers have never paid for that – materially or morally:
- Calin Popescu Tariceanu is now President of the Senate, co-chairman of the political majority and a prosperous businessperson. He has opinions that turn into laws and economic visions, he adds up, cuts, divides, poses, legislates.
- Liviu Dragnea – the PSD interface with the territory and the masses at that time, today doubles, triplets, offers and prospers.
None of the today’s decision-makers from behind any law are liable for the billions of euros – real money, withdrawn from development, investment, and even from wages distributed according to a social algorithm – and even are allowed to start over.
What does money mean and from where it is or will be taken
First, what that amount means:
It may be an odious cliché, but the fact that they are real money, paid on time and to personal accounts, could alleviate this feeling.
– The EUR 3 billion – won in court (so far – from which EUR 2.25 billion have been already paid) could have meant building 1,000 (one thousand) hospitals (24 in each county, to be enough for everybody) – even in the event that half of the amount would have been embezzled in the Romanian manner in the tenders.
– 260 km of motorway would have been built (even considering that the price per kilometer would have been Romanian – that is, twice the price from Bulgaria and Slovenia) – in the event that all the money was from the budget with no contribution from the European funds.
Beware: tax revenues decrease, only salary basis increases!
Beware of the main risk:
The comparison between the salaries and their increases with the salaries and increases in the other EU states – which everybody invokes – CAN NOT stand:
Over the last 5 years, tax revenues to the budget, instead of increasing from 29% to 40% (the same as the European average), have declined to 25%. And Justice will apply the law (the one made by people who have no responsibility), not the budget created based on pure arithmetic.
We should pay attention to the commitments and deadlines from the new unitary pay law: everything is paid. By us.
NOTE:
The calculations above have been made at an exchange rate of 4.5 lei/euro. I mean, anyway, higher than the 4.46 rate based on which some people who do not answer for anything made the calculations for the current year (how else?).
