Romania Govt Says Ctrl Bank Pay Cuts Stand

„The government decided the 25% pay cut for central bank employees still stands; however, the funds from the salary decrease will no longer be transferred to the state budget and will remain at the central bank’s disposal to be used to increase the bank’s reserves,” said Ioana Muntean, spokeswoman for the government.

Participants to the government meeting on Monday told MEDIAFAX earlier that the central bank would still transfer the money to the state budget, of its own accord.

According to sources at the Finance Ministry, the savings made following the salary cuts will be recorded as profit and will afterward be transferred to the state budget as part of the annual deposit of 80% of the central bank’s earnings.

„Under the existing laws, the central bank is allowed to transfer up to 80% of its annual profit to the state budget, so the money from the salary decreases will be included in this transfer. This is the solution the central bank and the Finance Ministry agreed upon so as not to breach European banking rules,” the mentioned sources said.

The European Central Bank Monday rebuked Romania for the second time in two months over plans to trim payrolls at the central bank, saying that government’s plans to leave the slashed funds at the bank’s disposal is still in direct violation of the central bank independence principle.

„The ECB understands (…) that certain salary rights are still intended to be and others have already been transferred to the state budget. For the latter, any such already transferred rights must be transferred back adequately to avoid any breach of the monetary financing prohibition in Article 123 of the EU Treaty,” ECB said in an opinion.