Romania risks losing EU funds as salary law talks collapse

Negotiations in Romania concerning a new salary law for public sector employees concluded Tuesday evening without an agreement, leaving less than three weeks until the August 31 deadline and putting Romania at risk of losing 770 million euros from the National Recovery and Resilience Plan (PNRR).

Political scientist Sergiu Mișcoiu noted that the current impasse stems from a long-standing failure to address the reform over the past four years, with discussions postponed until the PNRR pressure created a race against time.

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We have less than three weeks until the deadline for adopting the Salary Law, a PNRR benchmark. If we do not meet the benchmark by August 31, Romania will lose 770 million euros.

The talks, involving President Nicușor Dan and leaders from PSD, PNL, USR, and UDMR, followed discussions between the Presidential Administration and education unions. Union leaders rejected the current draft, arguing it did not uphold commitments made during the 2023 teachers' strike. Simion Hăncescu, leader of the Free Trade Union Federation of Education, called the project a "sham" and contested the calculation of new salary grids, suggesting the budgetary impact was overestimated.

Unions are requesting that the calculations be redone with the World Bank, which has been involved since 2022. Teachers also accuse the Ministry of Education of submitting incorrect data regarding university teaching norms.

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The project is a sham.

The PSD party announced it could not support the project in its current form, seeking modifications for the education and health sectors, including a phased implementation of new salaries. Florin Manole, a former labor minister, called for higher salaries for novice teachers and the retention of key medical system bonuses. The UDMR party questioned the funding sources, with Kelemen Hunor warning that the project would fail without political agreement and clear funding.

The PNL party focused on the financial aspect, with Siegfried Mureșan highlighting the 770 million euros from the PNRR at stake. "We have less than three weeks until the deadline for adopting the Salary Law, a PNRR benchmark. If we do not meet the benchmark by August 31, Romania will lose 770 million euros," he explained.

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It cannot turn out well if Parliament receives a text without a political agreement and without clarity on where the money will come from for the new grids.