Just recently I was complaining to The Woman that there aren’t enough journalists in Romania doing a good job at actually, you know, being journalists, digging into secrets, asking tough questions and writing well-researched pieces. Looks like I definitely spoke too soon!
Yesterday during an otherwise “boring” press conference, the journalist Corina Dragotescu got Traian Basescu on the ropes, peppering him with questions, causing him to completely flip his wig.
So far this story has only appeared in the Romanian (language) press, so all the translations below were done by Yours Truly, and therefore any errors are mine and mine alone.
If Romanian is your first language, you can read the text of the press conference here, a brief analysis of Ms. Dragotescu’s participation here and a somewhat hyperbolic analysis of the whole thing here (which clued me into this story).
First, however some background. The issue here is what in Romanian is called the Noul Cod al Muncii, which I have translated as “The New Labor Law”. If you’re British or Australian or Canadian, just pretend there’s a “u” in Labor ;)
I’ve never held a job in Romania but I know lots of people who work here and essentially, like most European countries (“western” or “eastern”), workers have a lot of rights. They get compensated for injuries on the job, illnesses and for being fired or laid off. They get guaranteed vacations and certain rights concerning how and when they can be fired (or hired). Romanian workers also “earn” a future pension (or “retirement money”) based on how much money they make at their jobs. Furthermore, all (legal) jobs consist of a contract between the employee and employer, stating in (remarkably) clear language the terms of their employment.
The long and short of it is that Romanian workers are fairly well-protected at the moment. The “New Labor Law” is a proposition that’s unique in Europe and eerily resembles the indentured servitude laws under which I slaved away for many years in the United States.
What I’m translating as “black market” jobs refers to people who have jobs but are not legally “hired”. That is to say, no contracts are signed, no vacation days are earned, no future pension payments are accrued, etc.
I’ve skipped over some of the text concerning other issues like Schengen accession and a long-winded passage about how the United States’ productivity levels are so much higher than in Romania or anywhere else in Europe. There are also some related issues mentioned (such as union contracts, etc).
From the press conference, speaking about Romania’s labor force. All bolding and other formatting is my doing:
President Traian Basescu: We have a uniquely attractive value [the labor force in Romania] but a labor market that’s extremely rigid. It is not just this rigidity that makes us less attractive but it also puts burdens on the workforce. Currently we have a huge deficit in the [government-run] pension funds, for example. Therefore the solution is to increase the number of workers, to make the workforce more flexible, which will allow us to reduce the burdens on the labor market.
Concerning this, what I must tell you is that it is essential that we adopt the New Labor Law. I do not want a confrontation, nor do I want to seem like an expert in these matters – there are others who are much more knowledgeable about the problems concerning the workforce in Romania than I – but I know of what I speak.
We have the advantage of having a work force with a unique value and therefore we also need a flexible Labor Law that will permit employees to hire a fluctuating work force on one hand and on the other hand will allow those who are looking for work a lot of options. Thusly, using the new Labor Law we can regulate this, legalizing temporary workers.
We must adapt labor contracts to suit the needs of economic agents and the requirements of theoretical options which no longer address Romania’s need to become attractive to investors. I do not wish to go into detail about the specifics of the new Labor Law but I must tell you that I know them quite well.
We could discuss, amongst other things, and I don’t know if you all remember this, but in 2009 the European Council launched a new concept: “flexible security”. This refers to making the labor force more flexible to give employees a chance to find a job more easily, that is to say a job for a limited period, or in other words being temporary employees, but it is also about hiring for longer periods, and the adaptation of employers to two essential things: the needs of the employees and the interest of the employer.
…We need the new Labor Law to address two fundamental interests: the employer, who spends and risks their money, and the employee, who needs a job. I believe that the new Labor Law exactly addresses these issues. I have heard absolutely ridiculous statements about this, talking of the “introduction of slavery”. This isn’t true. The employee will remain protected and the employer will be able to protect their their business. But if you all really want to, you can debate it as much as you wish.
I also want to stress that I don’t want you to misunderstand me and think this is about eliminating unions. But the project, the project of implementing a new Labor Law, I will spell it out very clearly to you: union bargaining agreements on the national level [and some other issues] will not be addressed by the (new) Labor Law. These will be addressed via other existing laws [blah blah].
The Labor Law establishes the relationship between employer and employee and nothing else. I believe that when the new Labor Law is eventually adopted, it will begin eliminating “black market” jobs, which are an alarming proportion of the current job market in Romania.
Indeed the primary reason that black market jobs exist is because of the lack of flexibility in the [current] Labor Law. Employers are currently hesitant to hire temporary workers because they must sign a [long-term] contract with employees. If they need to complete a project for a few months, employers [currently] prefer to hire “black market” workers because otherwise they must go through all the difficulties that come with hiring a full-time worker with a collective bargaining contract.
It is incorrect to say that full-time workers will be the most vulnerable under the new Labor Law. They are vulnerable right now because of what happens with the approximately 1.6 million Romanians who work at both part-time and longer-term jobs, many of them without a proper labor contract. This is a risk to their future.
Employees without a labor contract don’t pay social security, nobody contributes to the pension system, and nobody will pay if there’s an injury on the job. Therefore I believe we need to be realistic about what we must do. In the first place, we need to make Romania more attractive, and it is attractive already, because of our labor market, which is second after Poland in the region, third amongst European Union members if we also include Ukraine. That is to say, Romania is an important labor market and can be quite attractive but we must do everything possible to be attractive to investors.
All of this is what I wanted to tell you all about today. I have involved myself somewhat with the terms of the Labor Law because this was the topic, as I’ve outlined today concerning the problems of the labor market. And it is a fundamental subject as we look to our own future needs. Indeed it is important to make the Labor Law and the Romanian labor market more flexible.
I’ll take questions now.
Corina Dragotescu: I have two questions. The first concerns what you said, that salaries will be tied to productivity.
Basescu: That’s the proposal.
Dragotescu: Logically speaking, that means salaries won’t increase if productivity doesn’t increase.
Basescu: Mrs. Dragotescu, if you know another way to…
Dragotescu: No. First I wanted to verify…
Basescu: If you’ve understood what I’ve said.
Dragotescu: Yes, that’s what I want because you know it’s difficult for me to grasp.
Basescu: I don’t doubt it.
Dragotescu: I want to ask you concerning these conditions of the new Labor Law, don’t you think that this will prompt a new migration in the labor market, further worsening the imbalance that currently exists in the [government-run] pension funds? Realistically speaking, we won’t really have more people working but more retired people. This question is because of what you said about…
Basescu: Ma’am, this is your interpretation. If that’s what you think I said, I’m telling you that you didn’t understand a word I said therefore there’s no point in answering your question.
Dragotescu: No, that’s the logical conclusion based on what you said.
Basescu: I spoke very clearly: flexibility in the labor market will give many more people a chance to get a job. If you want to twist my words around, be my guest! But I told you very clearly…
Dragotescu: No, I am responding logically to what you said. If salaries do not increase, people will go somewhere where salaries are better.
Basescu: Mrs. Dragotescu, thank you for your questions. I’ve given you my response. You have nothing but a question. Thank you very much.
Dragotescu: But you didn’t answer my question.
Basescu: My response is the following: you don’t understand what I said. The new Labor Law, if it is adopted, will create many new jobs because employers will be able to hire temporary workers. Knowing there are no more difficulties in signing contracts for unspecified periods of time, employers will be enticed to open companies to hire people, temporary workers, and so on and so forth.
Dragotescu: But I am asking you about what you said, sir, about tying salaries to productivity levels.
Basescu: Mrs. Dragotescu, thank you so much. I have given you my response.
[other questions by other people on a variety of topics]
Dragotescu: Still on the subject of the Labor Law, Mr. President, how do you explain that this Labor Law, this new project to make the labor force more flexibile and to eliminate black market jobs, how do you explain all the opposition by the unions and organized labor? And how do you explain the fact that the only one, besides the government itself, in support of this new Labor Law is the Romanian-American Chamber of Commerce? Thank you!
Basescu: Jeez, you know I figure it? The same way that some 80% of the military, when they had their pensions increased still whistle and jeer when the national anthem is played, just as if their pensions were reduced. The same way everyone says their pensions were reduced but starting on January first Group 1 and 2 pensions were increased. A kind of strange fervor and disinformation coming from the leaders, those in the Army, those of the unions, appear on television shows that specialize in these feverish displays. I’m referring to the shows “Trustul Realitatea” and “Intact”.
Dragotescu: Can I ask a second question, even if you don’t answer? Because I have some colleagues here for whom you’ve answered a second question.
Basescu: Mrs. Dragotescu, I cannot refuse you a second question because I see you’ve waited your turn in line.
Dragotescu: Thank you very much for noticing, because I am quite disciplined.
Basescu: And I am aware of…
Dragotescu: Of women’s self-discipline, I know.
Basescu: Even if you were a man, we wouldn’t give up…
Dragotescu: That’s what I’m saying – self-disciplined women will like it. Mr. President, I wanted to know if the current Prime Minister’s skill set addresses Romania’s future needs? You mentioned the fact that the deadline of April 1 exists to put forth the proposal and the protection – the budget proposal – with a three year projection. You mentioned increasing surveillance of macroeconomic imbalances. Are you saying that there is a need to concentrate further on other issues before we address financial ones?
Dragotescu: Exactly! Do you believe that the current Prime Minister’s current skill set addresses Romania’s future needs? I ask about the immediate future as well as the next three or four years down the road, if you like.
Basescu: Ma’am, you’re bringing up a personal issue and I’m sorry but you know that in Cotroceni [the Romanian “White House”] we don’t involve ourselves in the kind of speculations you’re making. Good day!
Dragotescu: Thank you!
Basescu: Good day! This is probably par for the course where you work. But here we demand decorum. Your presence here obliges you to a higher standard of decency, ma’am!
Dragotescu: Mr. President, how has my question offended you? I only asked if the skill set of the current Prime Minister… a man who specializes in legal issues, corresponds to what you sir, have stated.
Basescu: Mrs. Dragotescu, you know very well what you said and what you have done. You know very well what you said and what you did. If you want to be vulgar, don’t be here. Next question please, if there are any more questions.
[other questions by other people on a variety of topics]
Later in the day, Corina Dragotescu appeared on Realitatea TV wearing a bright red wig just to show that she could be vulgar ;)
A lot of issues were raised in this press conference but you can see that Dragotescu got under Basescu’s skin, particularly on the subject of the Labor Law.
The last little jab there on the subject of the Prime Minister was referring to some inside baseball that’s a little too complicated for me to get into at the moment.
I will tie together this article with some other things I’ve been working on in a future article. There’s absolutely no way to know if the new Labor Law will be implemented the way Basescu is advocating. It looks like several of his political opponents are threatening to dissolve the parliament if this happens.
What I can tell you is that it is remarkable just how testy Basescu was on this subject and how interesting it is that it seems to be the brainchild of the Romanian-American Chamber of Commerce, the same bastards who worked so hard to get Ceausescu’s highly indebted dictatorship Most Favored Nation status in the 1970’s and 80’s.