Reuters/Romania hit by big public sector strike

Hundreds of thousands of Romanian public sector workers went on strike on Monday in protest at IMF-mandated pay cuts, raising pressure on the minority government before a November presidential election. Hospitals throughout the country dealt only with emergencies while teachers supervised children without conducting lessons in Romania's most wide-ranging protest since the fall of communism in 1989. Police and prison guards also joined the one-day protest which affected 800,000 public sector workers, trade unions said. Transport was unaffected. The strike underscored the difficulty facing the ruling centrists in pushing through fiscal reforms -- demanded by the International Monetary Fund in return for anti-crisis aid -- as they vie for public support in the Nov. 22 presidential vote. Last week, tensions over how to deal with recession and political manoeuvring ahead of the election drove the Social Democrat Party (PSD) to quit the ruling coalition, leaving centrist Prime Minister Emil Boc to head a minority cabinet. Despite the split, the PSD last week pledged to support government efforts to meet conditions for the IMF's 20 billion euro anti-crisis aid package. But it said it plans to team up with the liberal opposition to try to bring down Boc's cabinet in a no-confidence vote which may be filed in parliament later this week. "This kind of strike, engulfing the whole country, creates additional pressure on a government that is already very fragile," said political commentator Cristian Patrasconiu. "The danger is that if the PSD will play the populism card, we will be seeing very high pressure on reforms." Since the coalition split, economists warned IMF reforms may be at risk, plunging the leu currency and raising concerns over Romania's recovery prospects. Both Fitch Ratings and Moody's Investor Service said Romania's credit ratings could come under downward pressure if the problems threaten economic policies or delay fiscal reforms.

DIFFICULT CHANGE

The IMF has asked Romania to introduce sweeping fiscal reforms aimed at curbing unrestrained salary growth in the public sector, imposing controls on how tax money is spent and clarifying salary levels in different budget sectors. The goal was to free up state cash for modernisation, vital to bringing back foreign investment, prevent a financing crisis and diminish fraud in the European Union's second most corrupt state. It also put pressure on political groupings who routinely use public cash to win support from the vast budget sector, which accounts for a third of the work force, and funnel money to the countryside to secure backing. Boc appealed to civil servants to continue negotiations on wage reforms, saying any difficulties with implementing IMF terms may push the country deeper into crisis. "Everybody needs to be aware we don't have hidden financial resources that we just don't want to make available," Boc said. "Without understanding and dialogue, we can hamper the payment of wages and pensions even at this (low) level." But with teachers and hospital staff earning $500 a month on average, a fraction of EU levels, any curbs on salary growth and the government's proposed mandatory unpaid leave later this year is fanning growing discontent. Union officials said the strike may be extended and confirmed plans for a mass rally on Wednesday. "The discontent in the public sector is very big," said Marius Nistor from the Spiru Haret union.