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BUCHAREST, Romania - ONV LAW warns businesses about potential negative effect of recent Romanian government emergency degree, saying it could trigger a series of insolvencies and dangerous disequilibrium of the labour market.
In the emergency decree OUG 117 to be enforced on October 20, Romania is setting severe penalties for employers failing to pay wages more than 30-days due.
This measure can trigger a wave of negative effects in Romanian economy, one of the most important being that it can be easily abused and wielded as an instrument of pressure in the relation between employee and employer. Thus, the new law will cause further disequilibrium in local labour market and lead to a wave of insolvencies and bankruptcy cases - says Mihai Voicu, ONV LAW Partner and head of the firm's Business Law team.
Main criticisms related to the new law and its effects are
On Monday and Tuesday, more than 30 media outlets carried the news on the probable impact of the new ordinance.
The new law is coming to force as Romania is seeing one of the biggest price increases in Europe - with inflation at 5.3% - following a surge in energy and fuel prices of up to 30-35%.
The country is currently in a serious health crisis due to COVID-19 cases and has the lowest vaccination rate among European Union countries. Some Eu countries have come to the rescue sending respiratory devices, monoclonal antibodies or even offering to treat patients to alleviate ER shortage of capacity.