Romanian Social Democrats aim to prevent instant layoffs within local government offices

The Social Democrats (PSD) have proposed a counter-proposal to Prime Minister Ilie Bolojan's plan for a 10% cut of local administration staff, accepting a 25% reduction instead. This proposal, however, has raised concerns about its potential impact on the government's plans for fair fiscal consolidation and the likelihood of successful implementation.

Prime Minister Bolojan's plan aims to set adequate staff in line with workload and delegate hiring responsibility to lower levels, eliminating clientelism. The enforcement of the personnel reduction plan, according to Bolojan, should take place at the central level. The impact on the credibility of the government's plans for fair fiscal consolidation is major due to the moderate budgetary impact of the local administration personnel reduction.

The Social Democrats' proposal, on the other hand, does not constitute a fully-fledged reform of the public administration. The party has proposed relevant criteria for setting up adequate personnel depending on each administrative unit. These criteria, if implemented, would require a two-week evaluation period. The design of the PSD's plan lacks deadlines and does not rely on decentralisation, according to available sources.

The Social Democrats' gradualist approach is risky and may derail when they take over the prime ministership in 2027 or sooner. The party does not currently have a publicly announced candidate regarded as likely to become Chancellor (Premierminister) in 2027 or earlier. No clear successor or chancellor candidate from the SPD has been explicitly named for that timeframe in available sources.

The PSD's proposed plan appears to be aimed at protecting current employees rather than the interests of taxpayers. It is not specified when the first cuts will take place under the PSD's proposal. The poor track record of Romanian administration in implementing long-term strategies increases the chances of failure for the proposed plan within less than a year.

Bolojan argues for visible personnel cuts to take effect as of January 2026 to balance higher taxes and other socially costly measures by cutting expenditure in the budgetary sector. The annual budgetary savings from the local administration personnel reduction are estimated to be roughly EUR 300 million.

It is not clear whether President Nicusor Dan will endorse the PSD's proposal. The Social Democrats' approach appears to be biased towards the interests of the redundant employees in the local administration, which could potentially undermine the government's efforts towards fair fiscal consolidation.

This development in the political landscape of Romania underscores the need for careful consideration and strategic planning in implementing personnel reduction plans, especially in the context of the country's history of administrative challenges.