Public money as a union claim

If there is an element of judgement sine qua non in the economy that is ignored with hypocrisy and hatred by trade unions in Romania, this is labour efficiency. They don’t care if the company they work for – they and the union members they lead – has hundreds and thousands of billions in debts to the budget or third parties. They scream for higher salaries, for an end to layoffs, leaving the impression that they treat public money like an unruly cow that only violence will persuade to give more milk.

With their court action at the Bucharest Court of Appeals against Ordinance 58/2000 on strengthening salary and financial discipline, the proletarians-in-chief have proved again that they will not even consider thinking about how regies and state enterprises are working, before demanding their “rights.” To come before their followers as the Robin Hoods of transition, they cite any law, including the Constitution, to prevent the establishment of a fundamental link in any economy: salaries depend on the profit.

The fact that unionists view labour efficiency as a nuisance is obvious to anyone who looks at the emergency ordinance in question: it does not rule out higher pay, but only conditions it on limited losses, lower debts, in other words, reorganisation, with a flexible salary system and acceptance of profit as the principal criterion of the activity. Therefore, the unions have not sued against the missing connection between efficiency and salaries, but against the Government’s very attempt to eventually impose, ten years later, this correlation, lacking which, any amount of juggling with macroeconomic figures will not solve the basic problems of the Romanian economy. Ordinance 58, a result of the IMF accord, is the first attempt to correct salary aberrations in the real economy. Whereas in private firms retribution is strictly related to efficiency, in state companies payment is on the back of public money.

The Bucharest Court of Appeals surprised with its promptness in judging unions’ demand to void Ordinance 58. The decision that suspends this government decision cites labour legislation and the Constitution. Do the Constitution or labour legislation ban enterprise efficiency? Does the Constitution require premiums and pay raises without any relation with the dreadful quality of administration and work? Not at all! If the law and the Constitution are so generous and understanding with the losses, with poor management and out-of-the-blue salaries, unions should protest and ask for their salary money in front of the Bucharest Court of Appeals and not before the Government, which is attempting to straighten up salaries in state regies and companies that owe so much to the budget, suppliers and creditors that they don’t move a muscle when someone mentions the money.

The domestic mentality to put demands before results finds an odd and curious illustration in the Court’s decision. It is for the first time in modern history when civil laws are quoted to blatantly deny a fundamental economic law: retribution according to efficiency.

Much worse is that suspending Ordinance 58, the basic piece of the recent IMF accord, puts a serious brake on the development of this agreement, threatening the release of the other loan instalments.

With foreign financing underway, inflation and interest rates going down, the government is impeded in its attempt to drive arrears downwards to consolidate these successes. For what purpose or at what price, it remains to be seen.