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In 2008 the deficit was up to 5.4 % of GDP, in the context of an economic growth of 7.1 percent.
Government revenue is at 30-31 % of GDP, while in other EU countries it is up to 38-39 % of GDP
Inflation rate: 6.3% in 2008, 4.74% in 2009, 8% in 2010
In 2008 there were big differences in the public payment system, the salaries varied on a scale from 1 to 100
(some heads of agencies had incomes up to 20.000 Euros/month, while the lowest salary in the public sector
was around 200 Euros)
During the economic boom some of Romanian state agencies spent their money on yachts, trainings in Las
Vegas or on very expensive luxury cars
In the public administration system, bonuses like: bonus for returning from holiday, bonus for birthday, bonus
for smiling etc. had become a generalized practice;
There are no Romanian universities in Top 500
In Romania, there were approx. 2.5 million retired people in 1989 and there are now almost 6 million retired
people. Over 1.5 million retired people are 59 years old or less.
In 2009 the total deficit of the public retirement fund was 1.7 billion Euros; in 2010 it was 2.55 billion Euros. If
this process continues, the deficit is expected to reach at least 4 billion Euros in 2025.
The number of people with disability pension grew (by 430%) from 208.000 (1990) to 892.000 (2008)
In Romania there are over 900.000 people that receive disability pensions (from a total population of almost
22 million citizens) and in some districts their number rose up to 30 % from the total number of the retired
population. In other districts disability pensions go to only 6% -7% of the retired people.
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In 2009, we spent 39 billion Euros (approximately 8% of GDP) only on pensions; the tendency of this
expenditure is to grow.
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At present, for every taxpayer there are approximately 1.2 people that receive a pension of some sort
By the end of 2010, the number of public servants was 130.469. The total number of positions
in the public sector is 160.019 (a small amount compared to the number of contract staff), while
the total number of public sector employees is 1.266.550. In 2008 the total number of public
sector employees was 1.373.780 (107.230 more than in 2010)
Most of the local public sector employees, in 2008, worked in Administration, Defense, Social
Care (22.1 per thousand inhabitants), Education (17.3) and Health Care (14.6). Source: A.T.
Kearney study, 2008:
By gender:
Men: 36,14%
Women: 63,86%
Age groups:
20-30 years old: 7,09 %
31-40 years old : 28,94%
41-50 years old : 34,22%
51-60 years old : 26,65%
A mentality of the public administration which favors the importance of regulations over
implementation (the assumption is that once there is a law, the problem is solved)
The precarious functioning of both public services and private ones – theoretically, the
private sector should provide a model of service quality for the public sector (the citizen´s
trust in publicly owned companies is 42% while in private companies - 29%; in state
universities - 58% and private universities - 21%)
The “swing” between pre-bureaucracy and post-bureaucracy. The transition from the
communist administrative system to stages of development based on “reinventing the
government”, new public management and total quality management is difficult. On the top
we have the global economic crisis.
The lack of a managerial culture at the level of public administration and political decisionmakers.
The excessive influence of politics in public administration.
The lack of well defined indicators for performance measurement.
Coordination issues of the reform process at the local and central level.
Problems related to organizational culture, HRM and leadership. Lack of strategic planning
capacity.
Lack of trust in the efficient functioning of public organizations.
Convinced of the importance of informal relationships in solving issues that involve public
administrations.
Unsure of his/hers capacity to influence the public administration and the state.
Conscious of the important role played by public administration in his/hers life.
61% consider that the current problems Romania faces are due to the functioning
of public institutions.
High levels of trust:
Firefighters: 88%
Army: 71%
Ambulance units: 81%
Postal Services: 77%
Romanian National Bank: 68%
State Universities: 58%
Gendarmerie: 57%
Low levels of trust:
Members of the Parliament: 7%
City Hall: 27%
Mayor of the community they live in: 26%
NGOs: 27 %
Courts of law: 21%
Ministries: 16%
Government Agencies: 13%
15% believe that they can influence the strategic decisions that are taken at the
community level while 12% believe that they can influence the decisions that concern
the entire country.
48% consider that their lives are influenced by the decisions that are made by the City
Hall and the Local Council and 53% consider that their lives are influenced by the
decisions that are made by the Government, Parliament, and the President.
Sources: Trust Barometer, IRES, March 2010, Public Opinion Barometer, November 2007
A hostile attitude towards public institutions is based on the previous negative
experiences of the citizen:
Excessive bureaucratic procedures
An improper management of the relationship with the citizens
Slow functioning of the public administration in its relation with the citizens
Depersonalization of the relationship with the citizen
Lack of interest in the assessment of the citizens’ needs prior to the provision of
public services
Lack of a coherent measurement effort of the citizens’ satisfaction vis-à-vis public
services (lack of interest in the post-provision phase)
All these specific examples show the image of a state that faces
significant challenges regarding:
Predictability and coherence
Managerial performance
Rational use of public resources
Possible strategic reform directions:
A. Redefining the size, the role and the functions of the state
Changing the size: a more flexible, better organized state, able to be a partner for the
society
Redefining priorities: a state focused on good governance, quality of services and
performance
B. Increasing the efficiency of the state
Increasing the institutional performance. Making the public institutions focus on
results and performance and not only on procedures. Rational use of resources
Simplifying the administrative system: better regulation, simplified procedures and
enhanced predictability in the judicial process.
The government’s strategy in reforming the public administration between 2000-2008 was
based mainly on three dimensions:
a)
The reform of civil service (the creation of a body of professional public servants)
b)
The reform of local public administration (this is based on the enhancement of
public management at the local level and the promotion of decentralization and
deconcentration of public services)
c)
The development of the public policy formulation process (it is based on the
enhancement of the coordination systems of governmental activities and the
improvement of managerial capacity of governmental agencies).
Creating a unitary public pay system :
The ratio between the top and the bottom of the public pay system varies on a
scale from 1 to 12 (compared to a scale from 1 to 100, previously)
The decrease of the number of positions in the public sector
Improving the hierarchical system in the public sector together with the
gradations and wage level system
In 2008, over 10% (13.63 billion euros) of the GDP was spent on public sector
salaries, while in 2010 this percentage dropped to 8% (9.76 billion euro) of the
GDP
Reforming the pension system
Men and women will retire at the same age (65)
Recalculation of pensions established by special laws (applying the contributiveness
principle)
Increasing the number of contributors to the unified public pension system
Discouraging the early retirements by tightening access to this type of pension
New and more stringent criteria for disability pensions that will discourage abusive
retirements medically unjustified
Justice:
Passing 4 new legal codes: the Civil Code (in use since 1864), the Criminal Code, the
Civil Procedure Code and the Criminal Procedure Code
Decreasing the time necessary for rulings
Health Care:
Descentralization: 370 out of 435 public hospitals subordinated to the Ministry of
Health were transferred to the local authorities; only 65 hospitals of national interest
remained in the Ministry´s subordination
Classification of hospitals into five categories, based on competence
Reorganizing and improving hospital activity
Financial System Reform
Establishment of a Fiscal Council which analyzes whether government measures are included in the fiscal strategy. It
is formed from a representative of the National Bank of Romania, the Romanian Banking Institute, the Romanian
Banks Association, the Romanian Academy, the Romanian Academy of Economic Studies.
A 3-year fiscal budgetary strategy, which allows a medium-term vision in terms of revenues, expenditures,
investments, current expenditure of the state. Implementation of the multi-annual budgets of public institutions.
Unique income statement - one statement for contributions to health, pension, unemployment, personal income tax
– once a year (online) or every six months (in person)
Elimination of 248 special taxes (from 491 to 243). The final target is 100 special taxes
The introduction of cost and personnel standards for public administration (limitation of the number of employees
and the maximum cost by type of investment, in local government)
Broad utilization of the Public Acquisitions Electronic System (a growth from 4% in 2008 to 40% percent in 2010)
Listing, under private management, the property fund - estimated at 3.6 billion euros. The Property Fund was
established by the Government in December 2005 to compensate those whose property was abusively expropriated
by the communist regime. The Fund holds shares in 83 state and private companies, an important component of the
portfolio is represented by the sectors of electricity, oil and gas
Education Reform:
Massive decentralization of higher education (universities)
¨Funding follows student¨ principle
Classification of universities on the basis of international assessments
Classification of universities - research, education, advanced research
Focus on excellence through financial support of the best programs (based on quality
indicators)
Increasing the EU funds absorption
A new Labour Code (in debate)
Reducing the number of governmental agencies from 223 to 112
Reduction in public sector salaries by 25% (2009)
Reduction of pensions by 15% (rejected by the Constitutional Court). As such the VAT was
increased from 19% to 24%
Block vacancies and allow filling only 15% of the new vacancies
Banning the purchase of cars, office furniture and equipment by public authorities and
institutions
Freezing the pension point value for 2010
15% reduction of unemployment benefits, child allowances and other such social rights
Reduce by 50% of the norms of expenditure on fuel for public institutions and authorities
Dismissals in administration, education and health care: 34000 in 2009 and 63500 in
2010.
The difficulty of a state reform during an economic crisis: is the crisis only a threat or
also an opportunity?
Positive effects: in the fourth semester of 2010, the GDP grew by 0.1%; exports
increased by 28% in 2010, compared to 2009; the turnover in industry increased by
12.0% in 2010 and the industrial new orders increased by 26.3%. Economic decline in
2010 was 1.2%, less than the initial estimates of 1.9-2%.