ECONOMY

Romania OKs minimum wage hike of 28 pct

BUCHAREST (Reuters) – Romania’s government approved on Wednesday a 28 percent rise in the minimum monthly wage to 500 lei ($208) after months of negotiations with trade unions and employers, Prime Minister Calin Tariceanu said. Romania has seen double-digit wage rises in the last two years as the European Union newcomer catches up with the wealthy bloc’s living standards, now at a third of EU’s average in terms of GDP per capita. Asked if the government approved the minimum wage bill at the end of a government meeting, Tariceanu said, «Yes… it is 500 lei per month.» Economists say Romania’s fiscal and wage policy are pro-cyclical and put the burden of containing inflation too heavily on the central bank. However, the centrists are under pressure to keep strong wage growth as they struggle for survival in public opinion polls ahead of next year’s parliamentary election. The Labor Ministry has said the minimum wage might be hiked again in July to 540 lei if macroeconomic targets are reached.