Romania: IMF says don’t raise minimum wage

October 23, 2010

A visiting International Monetary Fund official urged ministers in the Romanian capital of Bucharest to rebuff union demands for an increase to the minimum wage, the Morning Star said on October 20.
The monthly minimum wage in Romania is just 600 lei (less than $200). But IMF mission chief Jeffrey Franks, in Romania to review the right-wing government’s progress in implementing an austerity program in return for a major IMF loan, warned any increase in the minimum wage would discourage bosses from hiring new staff.

The Morning Star said tens of thousands of people have protested in Romania in recent weeks. Protesters demanded the minimum wage be raised in light of the cuts program, which has slashed public-sector pay by a quarter and boosted the sales tax from 19% to 24%.

Romania’s government took a $27 billion loan from the Washington-based IMF, the European Union and the World Bank last year, when its economy shrank by 7.1%. In return, the government agreed to cut spending drastically.

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