Loss in competitiveness compared to Hungary and Poland: Real effective exchange rate – a critical indicator for Romania

Romania has improved its competitiveness compared to the Czech Republic and Bulgaria at the regional level in recent years but lost ground compared to Croatia,… Mai mult

Gas extraction from Black Sea will become unprofitable if investment starts after 2022 – ANRM estimate

If delayed long after 2022, the investment in natural gas exploitation in the Romanian commercial area of ​​the Black Sea could become unprofitable. Also, not… Mai mult

A decade of change in Romanian economy structure: Trade, public sector salaries and IT replace the loss of industry and agriculture contribution to GVA

The structure of Romania’s economy has a number of peculiarities compared to the European average in terms of the contribution brought by major sectors to… Mai mult

GDP 2020, equal to GDP 2019 in nominal terms and GDP 2018 in real terms

The National Institute of Statistics confirmed the signal result of the economic growth for 2020 at the level of -3.9%, in the first preliminary version… Mai mult

Romgaz will submit an offer to take over ExxonMobil’s stake in the Black Sea, in Neptun Deep

Romgaz (SNG) will submit an offer to take over ExxonMobil’s participation in the concession for the exploitation of natural gas from Neptun Deep perimeter in… Mai mult

Two graphs: The Romanian particularity of salary expenditures for public sector employees

de Cristian Grosu , 28.2.2021

Before analysing the two graphs below, let’s set the coordinates:

Expenditures with public sector staff (i.e. state employees) in the 2021 Budget are expected to amount to about RON 110 billion, representing 62% of the total budget. If pensions (including those from CAS) are added to this amount, the amount exceeds 90% of the total budget.

However, Not here is the big Romanian problem of the expenditures for public servants: this is because, relative to GDP (not to the budget), personnel costs are close to the European average.

The big problem is what Romania does with the money for personnel expenses and whom it actually pays: because that shows the vision of the Romanian governing power in recent years, namely in the last decades, regarding the development of the society and the role of the state in society.

This is because teachers, doctors, military personnel, counter staff, the judiciary and ministerial officials are also public sector employees.

A comparative analysis with the EU states, of the way in which public servants are paid in society, shows Romania’s big peculiarity: to how many fields Romanian governments attach importance.

For comparison within national budgets, the analysis also refers to the average salary in the manufacturing industry in each country – the one that, in an industrial Europe, ensures the economy driver, and ultimately, the salaries of public employees of all types.

The graph below represents the average salaries of various types of state employees, compared to the average salary in the manufacturing industry of each country.

The chart was drawn up by Ionut Dumitru, Chief economist of Raiffeisen Bank and former Chairman of the Fiscal Council and refers to the final data for 2019: because in 2020 Romania is even worse than in this chart.

A graph and its explanations

The 100% line represents the European average of average salaries:

  • Total per economy
  • Manufacturing industry
  • Public administration and defence; public social insurance
  • Education
  • Health and social assistance
  • Bulgaria           Portugal           Slovakia          Latvia  Hungary          Lithuania          Croatia                        Czech Republic          Greece            Poland             Italy     Slovenia          Estonia            Malta   France             Romania            Finland            Spain   Sweden           Germany         Austria             Denmark         Ireland             Cyprus                        Luxembourg


As we can see, in Romania the best paid public sector employees are those who form the public administration field and various forms of payment for the military.

Health field follows well behind, after which the Education, at an appreciable distance lower.

The manufacturing industry – which is the engine of the economy, has an average salary of almost half the salary of government employees.

The average salary in the total economy is 50% lower than in the administration.

Things are different for the others:

In Bulgaria, health ranks 1st followed by education and the administration only ranks 3rd.

In Poland, the 3 sectors are very close to each other and roughly equal the average salary in the whole economy.

In Hungary, all public sector salaries are lower than in the manufacturing industry, with the note that the second position (surprise ..) is held by the public administration and the last by the health sector.

What to observe in competitive economies:

In Germany, France, Austria, Sweden, Spain and Ireland all categories of public servants have lower salaries than in the manufacturing industry – which comes first.

In the second graph – we can see the above-average salaries in euros:

  • Total per economy
  • Manufacturing industry
  • Public administration and defence; public social insurance
  • Education
  • Health and social assistance
  • Bulgaria           Hungary          Latvia              Slovakia          Lithuania          Portugal           Poland             Croatia                        Romania         Czech Republic          Greece            Estonia            Malta               Slovenia          Italy     Spain   France             Cyprus            Germany         Finland            Austria             Sweden           Ireland             Denmark         Luxembourg


And other budgetary problems

Although we insist on the very large number of public servants that Romania would have, this is, at least at this moment, a myth:

Compared to other EU countries and relative to the active population, Romania is close to the European average.

Instead, it has 2 big problems:

1- Of the approximately 1.25 million state employees, about 850,000 work in the central administration.

2- The second major problem is the total number of employees in the economy – very small compared to the total population employed.

It would have been expected, starting with the 2021 Budget, for increases from the administration – some of them hallucinatory – to be somehow cut back, and the anomaly in the graphs above to be corrected: but that already means targeted policies on education and health and a little inconvenience for the big mass of public servants. Because this way of allocation is the residual communism.

Mergeți în homepage ›

Publicat la data de 28.2.2021

Lăsați un comentariu


New Renault boss: “Dacia is a miracle. It's time for the brand to flourish"

Luca de Meo (foto), the new general manager (CEO) of Renault group, considers that Dacia project proved to be a miracle and that no one… Mai mult

Pentagon transforms Campia Turzii unit into a NATO air hub at the Black Sea

A former Soviet airbase in central Romania could become a hub for US Air Force operations in south-eastern Europe, where the Pentagon is seeking to… Mai mult

Nuclearelectrica shareholders approved to terminate negotiations with Chinese for building reactors 3 and 4 from Cernavoda

Nuclearelectrica's Board of Directors has been mandated to initiate proceedings to terminate negotiations with China General Nuclear Power Group (CGN), as well as legal effects… Mai mult

Renault holds expansion of its plant in Romania, 15,000 jobs cancelled at global level

"Putting capacity growth projects planned in Morocco and Romania on hold" - is one of the measures included in the draft plan of Renault Group… Mai mult

Romania is a net importer of electricity in 2020 as well

Romania imported an amount of electricity of almost 796 GWh in the first month of this year, by more than 36% above what it exported… Mai mult

Shareholders of Galati steel plant promise investments of one billion euros

GFG Alliance has committed to invest one billion euros to upgrade Galati steel plant in order to reduce emissions and increase production. Another EUR 1… Mai mult

Transport Ministry announces it has sent to Brussels the financing request for Sibiu - Pitesti highway

The Transport Ministry, as the Intermediate Body in Transport, approved the financing request for the project "Construction of Sibiu - Pitesti highway", Sections 1, 4… Mai mult

Romania and Juncker Plan: EUR 720 million attracted, of which 35% by Transgaz for BRUA

(The map of investment financed through Juncker Plan, by GDP share. Darker colours mean higher shares) The operator of national natural gas pipelines, Transgaz (TGN)… Mai mult

Top 3 reasons why young people leave Romania

Lack of trust in authorities, corruption and low living standards are the main reasons why young people leave Romania. The data is part of a… Mai mult

IMM Invest Romania – program implementing rules have been published

The Ministry of Public Finance announces that it has issued the methodological norms for the implementation of the Program for supporting small and medium-sized enterprises… Mai mult

Pollution import and car park expansion: comparisons with the other EU states

Romania is the EU country with the fewest cars in terms of the number of inhabitants, according to data recently published by Eurostat. We appear… Mai mult

Government is trying to save budget deficit: reductions in public administration system, cancellation of bonus for harmful conditions, excise duty on soft drinks

The Government is preparing the public for the first measures aimed at avoiding the budget slippage, which would be applied by the PSD-ALDE government. News… Mai mult

Laura Codruta Kovesi remains alone in the race for European Chief Prosecutor

French Prosecutor Jean-Francois Bohnert will be appointed as head of the European Financial Prosecutor's Office, a position for which he was heard on Thursday, 11… Mai mult

Romania - EU country with highest risk of dying in a road accident, Bulgaria is quickly decreasing number of victims since it built motorways

Romania recorded the highest road deaths in the EU also last year, with 96 deaths per one million inhabitants in 2018, almost double the EU… Mai mult

Latest developments in progress at Health Ministry: Differentiated wages based on performance, competitions organised at a regional level not by hospitals

Sorina Pintea announced on Thursday further new changes that will be brought to the functioning of the health care system, including new rules for employment… Mai mult

ANAF changes selection procedure for liquidators. Main changes

The new order on approval and selection procedures for insolvency practitioners is an important step to a very good direction, industry experts say. ANAF is… Mai mult