Doctors and teachers make more money in Bulgaria than they do in Romania. How others are taking real measures to end the crisis

Redactor:
Simona Simionescu
Doctors and teachers make more money in Bulgaria than they do in Romania. How others are taking real measures to end the crisis
After the 25% salary cut, Romania's state employees will have the smallest wages in the entire European Union. Romanian state employees will be paid 1.1% less than their Bulgarian counterparts, teachers will receive salaries 5.3% smaller than Bulgarian ones and doctors will make 27% less than Bulgarian doctors.

•After the 25% salary cut, Romania’s stateemployees will have the smallest wages in the entire EuropeanUnion. Romanian state employees will be paid 1.1% less than theirBulgarian counterparts, teachers will receive salaries 5.3% smallerthan Bulgarian ones and doctors will make 27% less than Bulgariandoctors, according to calculations made by Gândulusing official statistical data from both countries. As compared toHungarian state employees, Romanian ones earn a lot less; 38% lessin the health and education sectors and 32% less in the publicadministration sector.

•Our neighbors make more money even though theytoo are cutting back. After freezing state employee salaries,eliminated the 13th yearly pension and increasing retirement agefrom 62 to 65 until 2012 the Hungarian government announced 29 newreform measures yesterday. Amongst these – a 15% cut in stateemployee salaries, but also taxing banks, eliminating free workcars and reducing taxes applied to companies. The Sofia Governmentalso recently adopted a package of 60 anti-crisis measures thatinclude a 10% salary cut in public sectors that have not reducedtheir personnel numbers, postponing their pension increase andluxury taxes for expensive homes and cars.

After the 25% salary cut, Romania’s state employees will havethe smallest wages in the entire European Union: a state employeewill be earning an average of 394 Euro/month, a teacher will bereceiving 306 Euro while in the health sector average net salarywill be of 244 euro, according to calculations made byGândul using data from the National Institute ofStatistics (INS) valid as of the end of the 1st quarter.

Statistically speaking we weren’t doing that good before in thisrespect, but at least the salaries of Romanian state employeesexceeded those of our neighbor state employees south of the Danube.But as soon as the Government applies the austerity measures,Romanian state employees will be paid 1.1% less than theirBulgarian counterparts, teachers will receive salaries 5.3% smallerthan Bulgarian ones and doctors will make 27% less than Bulgariandoctors, according to calculations made by Gândulusing official statistical data from both countries.

As compared to Hungarian state employees, Romanian ones earn alot less; 38% less in the health and education sectors and 32% lessin the public administration sector. „Why wonder why we have thesmallest salaries when that’s what our political class is settingus up for… That is while state employees in countries that joinedthe EU before Romania and Bulgaria earn on average 840 Euro, with1400 Euro in Slovenia and 1500 Euro in the Czech Republic while inolder European member states average net salary is of 2700 Euro”,stated for Gândul Vasile Marica, President of theSed Lex National Alliance of State Employee Trade Unions.

Our neighbors cut back a while ago

The decision to cut 25% of Romanian state employee salaries,accompanied by a 15% cut in pensions comes in the context of theausterity measures the Government assumed responsibility for inorder to reduce the budget deficit from 9.1% to 6.8%, as per thedeal reached with the IMF.

Upon applying these cutbacks, the Government hopes to save2.6-2.7 billion Euro in the second half of the year, namely 2.3% ofGDP, as Sebastian Vlădescu, Minister of Finance, recentlyannounced. Hungary too made cutbacks when it comes to reducingstate expenses, and it made them last year.

Amongst others, the Budapest Government took the decision tofreeze state employee salaries, eliminated the 13th yearly pensionand raised retirement age from 62 to 65 until 2012. As regardstaxes and duties, VAT was increased from 20% to 25%, and excisetaxes on cigarettes, alcohol and fuel were hiked one percentagepoint, up to 6%. Yesterday the Hungarian Prime Minister announcednew reform measures aiming to cut the budget deficit, which includea 15% cut in state employee salaries but also taxing banks,eliminating free work cars and reducing taxes applied to companies,from a total of 29 measures.

The Sofia Government recently adopted a package of 60anti-crisis measures meant to reduce budgetary expenses andincrease state income by 818 million Euro. The proposals of theBulgarian Government include a 10% salary cut in public sectorsthat have not reduced their personnel numbers, postponing theirpension increase and luxury taxes for expensive homes and cars.

Romanian bank employees earn better than theirsdo

Romanians make up for it with our Hungarian and Bulgarianneighbors when it comes to the field of financial intermediationand insurance, where the largest salaries are recorded.

As such, at the end of the 1st quarter, brokers, dealers andemployees of Romanian banks earned an average of 951 Euro, 9% morethan Hungarians (872 Euro) and 46% more than their Bulgariancounterparts (651 Euro).

„Salaries in financial intermediation have grown a lot eversince bank salaries started going up a few years ago in banks inRomania. There was a lot of competition back then to attracttrained personnel. I don’t think this has happened in othercountries”, stated for Gândul Aurelian Dochia,managing partner with the Concept financial consultancy company.Practically, the salary differences have to do with the specificsof the financial market, with the deficit of qualified labor forcein the field.

„It is possible that our Hungarian and Bulgarian neighbors havea more qualified labor force than we do”, added Dochia.

Romanian real estate agents were hit hard by thecrisis

Financial intermediation is the only field in which Romaniastands clearly above the two other countries. In others, thedifferences are mostly in favor of our neighbors. For example, inreal estate, a sector that was booming in the years prior to thecrisis, Romanians ended up being paid an average of 319 Euro permonth, a lot less than Hungarian (414 Euro) and Bulgarian (354Euro) real estate agents. It is true however that residence andland price increases were lower than in Romania, and the sector didcontract less during the recession.

„In real estate salary is made up of a very small fixed part anda variable commission. Now salaries have gone down because thecommission has gone down on account of a drop in transactions butalso because transactions are being closed at smaller values”,explained to us Antonio Zărnescu, General Manager of AdviserManagement Solutions. He reminds us of a time Romanians boughthouses and lands without thinking about it, pressured that theycould lose the deal if they would wait a few days more, but alsowanting to get rich over night.

„Before, waiting was a problem for the buyer, who was anxious tobuy, now waiting has become a smart thing, because everyone ishoping prices go down”, added Zărnescu.

Romanians make less than our neighbors in the field ofelectricity production and supply, even though it has importantresources. As such, while Bulgarians receive an average of 663 Europer month and Hungarians 689 Euro per month average net salary inRomania in this field is of 626 Euro.

„In Romania almost 80% of employees in electricity productionand supply are state employees. In the 1990s their salaries werehigher than those of other state employees, but after 2004 thedifference grew less. Bulgaria is the same as Romania was backthen”, explained officials in the energy sector. More so, half ofelectricity production south of the Danube is nuclear, whichexplains the higher salaries due to bonuses.

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