Today the Romanian government faces yet another no-confidence vote on an issue which profoundly affects Romanian workforce. Below is an extract of analysis from 01 March 2011, taken from our Political Risk and Security Review. To receive the review, which provides condensed, easily digestible analysis on the risks arising from both the political stability of a country or region and the implications for business of a country’s macroeconomic and social policies, contact alice.boyes@inkerman.com. This week’s issue is out today!
NEW LABOUR CODE TO PROMPT NO CONFIDENCE VOTE AND MASS STRIKES IN ROMANIA
(Deterioration: Political Instability, Mass Protests, Corruption)
Adoption of a new Labour Code, which is supposedly designed to combat the labour black market, make the country’s labour relations more equitable and its economy more efficient, is set to continue presenting significant problems for the Romanian government. The bill was adopted without consultation on 28 February 2011, to accelerate reform, but at the same time this move prompted the opposition to seek a confidence vote against the government led by Democratic Liberals (PDL). It is to be held on 08 March 2011 and the opposition is further threatening a censure motion, with the trade unions, who signed a memorandum of support with the opposition, warning of general strikes. The reason, at least from the union perspective, is that the bill will achieve the opposite effect and that work without contract will flourish following its introduction, “turning workers into slaves”. The unions are reportedly planning street protests to last throughout the week, peaking in a strike on the day of the confidence vote. The country’s Prime Minister, Emil Boc, claimed this week that he was not worried about the vote, and indeed his incumbent government has survived several votes of no-confidence in 2010, all of which were prompted by the unpopular austerity measures it implemented amid a severe economic crisis. The opposition parties currently have a total of 214 seats in the 471 seat parliament and need at least 236 votes to prevail over the executive. It is currently difficult to see how the opposition parties are going to achieve their aim by democratic means, but The Hungarian Democrats (UDMR), a political group which is part of the governing coalition, added an element of drama to the forthcoming vote, by electing its new leader on 25 February 2011. Kelemen Hunor, the expected favourite, was confirmed as the winner and this appears to have played in the incumbent government’s favour, as Hunor wants his party to remain a part of the coalition. But sources indicate that there are plenty of people in his party that want to vote with the opposition. The political agitation around the Labour Code is doing lot of damage to the credibility of the current government among the voters. This week’s emerging stories about corruption at the highest levels of the government, which the President Traian Basescu openly endorses in his anti-corruption drive, and arrests of prominent customs officials, are not helping the politician’s credibility either. For this reasons, even though the labour reform is a genuinely divisive issue in Romanian society, the protests staged by the trade unions are likely to attract participation that may be considerably higher than that observed in Romania in the recent past.
