Almost half of Romania’s workforce is found in the service sector. The industry employs about one third and agriculture one fifth. Millions of Romanians are expected to work in other EU countries, and many are in the informal sector.
Romania has long had low registered unemployment compared to other Eastern European countries. However, the figure rose to a peak of almost 12 percent at the end of 1999 and thereafter to decline steadily for several years. In the autumn of 2008, the official unemployment rate was below 4 percent, but the following international financial crisis pushed the level up to around 8 percent in 2009-2010, after which it has again fallen to just over 4 percent. Among young people, the figure is considerably higher (see fact box).
Outside of the statistics there are also many underemployed people, including in agriculture, and a large informal sector.
Romania has a high proportion of qualified workers, but the wage situation is significantly below the EU average. Many Romanians have applied for work abroad, and it is now estimated that between three and five million Romanians work abroad, mainly in other EU countries. Consequently, there is a shortage of labor in the big cities. In an effort to halt the labor flight, wages in the public sector were increased by 25 percent in 2017-2018. The minimum wage was also raised and is now at the equivalent of about SEK 4,400.
A normal work week includes 40 hours, and employees are entitled to at least 21 days of vacation per year.
- COUNTRYAAH: List of key population facts of Romania, covering most basic population data, religion statistics, and language profiles.
The right to join trade unions is enshrined in the Constitution as well as the right to strike (exceptions can be introduced for employees at certain key functions in society).
The trade union movement has lost in strength since the early 1990s. In many respects, the union had problems with the transition to a free labor market when many of the state-owned companies were closed down or went into private ownership. The former largest CNSLR-Frăţia trade union organization had about 2.5 million members in 1993, compared to 800,000 members in 44 federations in 2015. Nowadays, the Christian, politically independent Alfa Cartel is the country’s largest national organization with around a million members. The central organization BNS organizes around 300,000 employees, mainly in the service and transport industries. A fourth major trade union organization is CSDR with more than 100,000 members.
FACTS – LABOR MARKET
4.2 percent (2019)
15.0 percent (2019)
The Senate adopts legal reforms
The Senate (the House of Parliament) adopts the judicial reforms that were passed in the House of Commons on December 11 and criticized by the opposition and the EU and the US for reducing the independence of the Romanian judiciary. President Iohannis must ratify the laws in order for them to take effect. He has called them “a step backwards for the justice system and for the fight against corruption”. Iohannis has also warned that Romania may end up in the same situation as Poland, whose judicial reforms have led the EU to initiate a sanctions process against the country (see Poland, calendar).
The lower house adopts criticized legal reform
Parliament’s House of Commons votes for a controversial bill that limits the anti-corruption unit’s DNA powers. Among other things, DNA should no longer be able to examine the country’s judges. At the same time, the president is deprived of his influence over appointments of senior prosecutors. Demonstrations against the bill, which critics believe reduce the judiciary’s independence and make it more difficult to fight corruption, have been ongoing since mid-November in the country’s major cities. Members adopt the bill with 179 yes votes against 90 no. The Senate votes on the bill in January 2018.
Ex-king Mihai I dies
Romania’s ex-king Mihai I dies at the age of 96 after a period of illness. Mihai was a monarch between 1927 and 1930 and 1940 and 1947, when the communist regime abolished the monarchy. Mihai became best known for contributing to Romania switching sides in World War II, from Nazi Germany to the Allies. Mihai, the cousin of British Queen Elizabeth II, lived after exile from Romania in exile in Switzerland.
Tax reform is being pushed by the government
The government clubs a debated tax package and changes the financing of social insurance. The reforms receive criticism from both employers and trade unions. On January 1, 2018, the basic level of income tax is reduced from 16 per cent to 10 percent and small and medium-sized companies are subject to 1 per cent sales tax. Social insurance is changed so that only workers contribute to the costs, not employers. The reform package must be approved by Parliament before it can come into force.
Manifestation to protect the judiciary
More than 10,000 people gather on the streets of Bucharest and other cities to protest the government’s proposals that protesters consider eroding legal security and protecting corrupt holders of power. The legislative proposals restrict the anti-corruption unit DNA’s powers. Among other things, DNA should no longer be able to examine the country’s judges. At the same time, the president is deprived of his influence over appointments of senior prosecutors. The European Commission has also warned that the proposed legislative changes could undermine the fight against widespread corruption.
Government reform is believed to strengthen the prime minister
Prime Minister Mihai Tudose dismisses three ministers after the Social Democrats’ top leadership approved a government reform. Two of those who are allowed to leave the government are regarded as closely allied with party leader Liviu Dragnea. They are Deputy Prime Minister Sevil Shhaideh and Minister of EU Funds Rovana Plumb. Transport Minister Răzvan Cuc gets fired for the construction of highways not taking place at a calculated rate. Tudose has said that corruption allegations against Shhaideh and Plumb have given the government problems in working with the European Commission. Tudose is also believed to be able to strengthen his own position vis-à-vis the party leadership through the government reform.
The Deputy Prime Minister is suspected of crime
Prosecutors at the Anti-Corruption Authority are launching a criminal investigation against Deputy Prime Minister Sevil Shhaideh. She is suspected of abuse of position by helping a municipality in 2013 to illegally take over state agricultural land, which was then leased to private companies. Shhaideh is politically close to Social Democratic leader Liviu Dragnea, who until 2012 led the municipality in question.
The government is pursuing legal reform
Despite domestic and international criticism, Justice Minister Toader says he intends to try to push through the proposals for changes in the judicial system that can strengthen the government’s governance of the judiciary. The EU Commission representative in Bucharest, as well as the US and Germany embassies in the country, warns that the legislative changes could weaken the fight against corruption.
Protests against proposed legal reforms
Both the president and the prosecutor criticize a government proposal that deprives the president of his influence in the appointment of higher prosecutors, including those affiliated with the country’s anti-corruption unit DNA. The government also wants to restrict the powers of DNA. For example, DNA should not be allowed to examine the country’s judges. President Iohannis describes the proposal as a threat to the rule of law, the independence of the judiciary and the fight against corruption. Several civil rights movements also urge the Minister of Justice to withdraw the proposal. The European Commission calls on the Romanian government to explain in detail what changes it wants to implement.
The new government is approved
A large majority of parliamentarians approve the new government led by Mihai Tudose. As a first measure, the government announces a review of the tax system. Among other things, the “flat” tax on 16 percent of income and corporate profits is proposed to be abolished. President Iohannis criticizes the tax plans, which he says run the risk of creating financial turmoil and frightening investors.
The Minister of Economy is proposed to be head of government
The SPD government nominates Minister of Economy Mihai Tudose as new Prime Minister after Sorin Grindeanu, who was dismissed by her own party mates.
The government is falling
Prime Minister Grindeanu is forced to resign after having been cast in a high-confidence vote in parliament requested by his own party PSD. Thus, his entire government also falls. As the PSD retains the majority in Parliament, along with its ally Alde, the party is expected to nominate a new candidate for prime minister. Grindeanu has been blamed for the government’s failure to push through important reforms.
Hard power struggles within PSD
The ruling PSD withdraws its support for Prime Minister Grindeanu on the grounds that he failed to implement economic reforms. In fact, a fierce power struggle between Grindeanu and PSD chairman Liviu Dragnea is behind the party’s demand for the departure of the prime minister. According to analysts, Dragnea has long wanted to take the post of head of government, but the conviction against him for election fraud prevents him and the fact that he is facing trial for abuse of power. Grindeanu has said he refuses to resign before Liberal President Iohannis has appointed a new PSD prime minister. That puts Iohannis in a sort of step 22 because the constitution forbids him to appoint a new head of government before it has previously resigned. One day later, the PSD announces that the party intends to issue a statement of no confidence towards Grindeanu.
Call for a referendum stop
Dozens of human rights organizations are appealing to Parliament to say no to a proposed referendum to restrict the constitution’s definition of marriage. If the referendum is carried out and gets the majority’s support, it will be impossible to approve same-sex marriage in Romania. The Family Alliance Organization, which is behind the proposal for the referendum, also wants to abolish subsidies on birth control and abortion, make it difficult for divorces for parents of underage children and lower some taxes for married couples. The Alliance’s proposals have so far been approved by the Senate.
Sentenced persons may not become ministers
The Constitutional Court backs the law that prevents convicted persons from holding ministerial posts. The law strikes against PSD chairman Liviu Dragnea, who now has no opportunity to become prime minister. On the other hand, he can run in presidential elections because that post is not covered by the law. At the same time, the Senate Judiciary Committee decides to reject a bill to grant amnesty to people convicted of bribery.
Romania is dotted for lousy prisons
The European Court of Human Rights blames the Romanian state for the poor conditions in its prisons. According to the court, the prisoners are treated in an inhumane and abusive manner. Four Romanians had turned to the Strasbourg court to complain about overcrowded cells, unsanitary conditions, poor food and problems with rats and insects. The Court says that Romanian prisons are generally characterized by major structural deficiencies. Several similar cases are being dealt with by the court, but these processes are now being interrupted to give the government time to rectify the abuses.
Leading lawyer becomes new Minister of Justice
President Iohannis appoints party politically independent lawyer Tudorel Toader as new Minister of Justice. Toader is one of Romania’s leading lawyers and a member of the Council of Europe’s Venice Commission.
Referendum on corruption
Unanimously approves the president’s proposal to organize a referendum on corruption; How the question is to be asked and when the vote will take place remains to be decided.
The protests continue
Over the weekend after the government decree was withdrawn and the Justice Minister resigned, upwards of 80,000 people around the country again demonstrate the demand for the entire government to resign. They are the thirteenth day in a row of protests against the government.
The government survives the vote
The government is able to pass a vote of no confidence in Parliament with a good margin. The opposition needs 233 votes to be able to topple the government but only gets 161. The next day, however, Justice Minister Florin Iordache resigns as a result of the harsh criticism of the law decree, for which he has been the main responsible.
Criticized decree is withdrawn
After major demonstrations and international protests, the government is withdrawing the disputed decree that would allow corrupt politicians to avoid prosecution and punishment. But the demonstrations continue for the sixth day in a row and in Bucharest over 200,000 are believed to be protesting against the government. PSD leader Dragnea claims the protests are carefully organized by “powerful forces”.
Continued battle over corruption teams
The opposition party PNL submits a request for a vote of no confidence in the government in Parliament. The ruling PSD Vice President Mihai Chirica appeals to the government to withdraw its newly issued decree to decriminalize certain types of corruption crimes. The decree has triggered extensive protests that are increasing every day and are now the largest since the fall of the communist regime. Between 200,000 and 300,000 people are expected to attend demonstrations in Bucharest and other cities. and Chirica says he understands the “legitimate demands” of the protesters. President Iohannis asks the Constitutional Court to examine the legality of the decree. The Minister of Industry is leaving the government to “be able to look his son in the eye”.
Decree on impunity for corruption
Despite widespread protests and appeals from the president, the government issues a decree decriminalizing certain types of corruption crimes. Among other things, the decree means that the ruling Social Democrats leader Liviu Dragnea can avoid prosecution for abuse of power. Among those protesting against the law changes are the Prosecutor General, the Special Prosecutor for Corruption Crimes and the Chairman of the Court of Appeal.
Protests against corruption
Around 20,000 people are demonstrating in Bucharest against the government’s attempt to pardon corrupt politicians and decriminalize other crimes. About the same number participate in demonstrations in other Romanian cities.
EU monitoring continues
The European Commission also decides to keep Romania under special supervision in 2017 due to the country’s major problems with corruption. Among other things, reforms in the justice system must continue and transparency in how the country’s higher prosecutors are added. The Commission also calls for stricter rules for the activities of MPs and ministers and guarantees that politicians do not interfere in the work of the courts.
The president intervenes against the law of corruption
President Iohannis is trying to persuade the government not to enforce a law package that would save corrupt politicians from prosecution and trial. The Minister of Justice wants the laws to be passed through decrees, which would have them come into force immediately. Among other things, some wrongdoings would no longer be considered crimes and the concept of “abuse of power” would be redefined. A new law on the possibility of pardons has been proposed to reduce the pressure on the country’s overcrowded prisons. If the laws are passed, Social Democratic leader Liviu Dragnea could possibly avoid trial for abuse of power. Over the following days, thousands of Romanians in the streets in a number of big cities protest against the government’s attempt to purge corrupt politicians.
New government takes over
By a good margin, the proposed coalition government between the Social Democratic PSD and the Liberal and Democratic Alliance (Alde) wins a vote of confidence in Parliament. Sorin Grindeanu takes over as prime minister. The government comprises 26 ministers, five more than in the former.