Romania's last-chance salary law talks at Cotroceni before €770M EU deadline

Race against the deadline

Romania faces an August 31 deadline to adopt and promulgate the unitary salary law, a requirement tied to a PNRR milestone that would unlock approximately €770 million for investments. Interim Labor Minister Dragoș Pîslaru warned on Monday, August 10, that this is likely the last week to reach a political agreement on the reform. The law has been postponed for four years and resurfaced after the government became interim, according to Pîslaru.

President Nicușor Dan has convened party leaders Sorin Grindeanu (PSD), Ilie Bolojan (PNL), Dominic Fritz (USR), and Kelemen Hunor (UDMR) to Cotroceni Palace on Tuesday, August 11, around 16:00, for a new round of negotiations on the salary law. The meeting comes as Romania marks 100 days without a full-power government on Thursday, August 13.

Disputes across parties and sectors

Significant disagreements remain between parties and between the Ministries of Labor and Health over the reorganization of salary grids. PSD, UDMR, and AUR have rejected the current form of the project, with social democrats repeatedly stating they cannot vote for a law that reduces incomes for certain categories of public employees. PNL and USR have dismissed these accusations and assured that the document does not cut any income.

The strongest opposition comes from Health and Education employees, who argue that the elimination of certain allowances would reduce their incomes. The government counters that compensatory amounts will prevent any salary decrease. Pîslaru stated that over the past three weeks he worked over 14 hours a day to improve the project, especially in the sensitive health and education sectors.

Budget envelope and union demands

The budget envelope for the law was increased from 8 billion lei initially proposed to 12 billion lei. However, union demands reach 20 billion lei, according to Pîslaru. The project allocates approximately 12 billion lei to correct inequities, establish a predictable framework for salary expenses, and re-establish payroll in an increasingly fragmented public sector. Pîslaru said over two-thirds of public employees would receive salary increases, and over 800,000 employees would be directly helped.

Presidential advisor Radu Burnete defended the law in an interview with Libertatea, stating that it brings order and predictability to a system he described as confused, with over 160 allowances, half of which the law would eliminate.

I believe that whoever says this law is worse than what we have right now has not read the law. It brings a great deal of order and predictability to a system that is confused.

Burnete also said that when you adjust salaries for over one million people, all kinds of oddities appear, especially given the mess that existed. He criticized the public discourse on the topic, saying it had gotten out of control this summer.

Moody's and broader stakes

Pîslaru noted that the law was mentioned in Moody's assessment on Friday, in which Romania again avoided a rating downgrade because the Bolojan Government made necessary reforms and attracted European funds. The assessment stated that adoption of the salary law could lead to a rating improvement in the future.

Pîslaru argued that the law would introduce wage predictability, removing the possibility of parties making discretionary salary increase promises ahead of the 2028 elections. He appealed to political leaders to be responsible and support the law, noting that credit could be naturally shared among parties that back it. The project has not reached Parliament during two extraordinary sessions so far, and Pîslaru described the chances of passage as diminishing week by week.