Currently, the favored option is that wages in the public sector cannot increase by more than 2.6%. It is not yet clear how much money the state will be able to save by such a measure.
According to Finance Minister Arvils Ašeradens (New Unity party), salaries in the public sector rose by almost 15% in the first half of this year, and this should be limited next year. Coalition politicians promise that this will also apply to political officials, including MPs and ministers.
"If the government accepts it [in its cabinet meeting] tomorrow, this will be a very clear signal to the entire public sector. And MPs and ministers are no exception. So, within this framework, appropriate decisions will have to be made regarding this limitation of wages," said the Finance Minister.
Considering the shortfall in the state budget, state institutions will reduce their spending on goods and services next year.
This could save around 50 million euros. Jobs in the state administration that have been vacant for more than a year will be eliminated. In addition, politicians promise not to increase the total number of positions in the public sector next year.
As previously reported by LSM, in Q1 2024, compared to Q1 2023, in the public sector the annual rise in the average earnings was 7.4 percentage points higher than in the private sector – 16.3 % and 8.9 %, respectively.
In Q1 2024, the average monthly earnings before taxes in the public sector totalled EUR 1 657 while in the private sector they were EUR 43 lower, i.e., EUR 1 614. The average earnings in general government sector, which includes central and local government institutions as well as enterprises controlled and financed by the central and local government, went up to EUR 1 606 (up by 17.6 % over the quarter).
A low cap on public sector wage increases would likely result in some movement in the labor market from the public to the private sector – judging the size and impact of such a shift will form part of the government's calculations.
