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Financial Participation

In the context of the privatization process which took place after 1990, 30% of the shares of Romanian commercial companies were transferred to the Romanian workforce. Many of those who received shares sold them in the following years, so that the proportion of shares in employees’ hands has fallen significantly.


Employee share ownership was initially introduced in the last decade of the communist regime (at the beginning of the 1980’s) in the form of so-called “social parts” of the “national capital”, which had to be purchased by each employee. In the course of the privatization process that started in 1990 these accumulated assets have been returned to the employees as an amount of money paid to each one of them; the remaining capital was to be privatized in the following years.


With the privatization laws of 1990, 1991 and the following years the employees’ financial participation was put on a new basis. As much as 30% of the shares of Romanian commercial companies were transferred to the resident population in form of free-of-charge property vouchers. The remaining 70% of shares were to be sold to Romanian and/or non-Romanian investors. Another focus of the privatization laws, especially in 1994–1995, was the “MEBO method” (“Management Employee Buy-out”), which was defined as the standard privatization procedure for small enterprises (in general, companies with fewer than 500 employees). In the years 1994 to 1997 in particular many enterprises were privatised using this method. Employee share ownership has been particularly prevalent in labour-intensive companies.1

Cooperatives have been part of the Romanian economic landscape from the second part of the nineteenth century. Under the communist regime many of their fundamental functions were altered, primarily their essential democratic decision-making rights. Despite their long tradition in Romania, cooperatives nowadays no longer play such an important role.


Another form of employee financial participation is profit-sharing. The most widespread profit-sharing scheme in Romania after 1989 is “gain-sharing”. Employees receive a bonus at the end of the year, depending on their and the company’s overall performance. The basis of calculation is the company’s net profit.


At the moment, the topic of employee financial participation enjoys no special attention from the government or political parties. The only aspect on the agenda is the sale of minority shares to the employees in the course of further privatization of companies from the autonomous administration (regii autonome) and other state companies that have not been privatized yet. Parts of the population are sceptical about employee financial participation, as corruption scandals and insider deals suspicions were a constant companion in some of these privatization cases.

Wilke, Maack and Partner (2014) Country reports on Financial Participation in Europe. Prepared for www.worker-participation.eu. Reports first published in 2007 and fully updated in 2014.