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| PENSION RISES IN THE MIDST OF A POLITICAL STORM (5.07.07) |
| (2007-07-05) |
| Last updated: 2007-07-06 11:57 EET |
The publicized major pension rise pitches the Romanian President against the Prime Minister. Basescu says that commitments assumed in this case are unrealistic and warns that he will not promulgate the law before receiving assurances that the National Pension Fund will not collapse by the end of next year. Traian Basescu:
”My main objective is for this law to become applicable, starting from the premise that pensions must by all means increase. What I don’t want to see happening, however, is for this law to turn out to be only an electoral ruse.”
Consequently, the president has called on the Executive to clearly explain to the population from where it will get the money for the hefty increases: 50% as of September 1st for farming pensions and 43% for the public system pensions, starting next year. Prime Minister Calin Popescu Tariceanu responds that he will not give up the pension rise project and gives assurances that this will not put at risk economic stability and investments in key sectors, such as education and health care.
‘The government has created the necessary economic foundation, in order to start distributing the welfare. We want to make sure pensioners will enjoy a decent life, as economy will grow and pension rise opportunities will be higher. A Liberal party in a modern European state governs not only to the benefit of entrepreneurs, but of all social categories. Increasing pensions is not a left-wing measure”, the Prime Minister says.
Minister of Economy and Finance, Varujan Vosganian, upholds Tariceanu’s statements, documents on the table, adding that pension rise financing sources rely on the growth of GDP, as well as of the number of employees and of wages. An increased GDP, expected to go up by 6.3% next year, will generate about 1.2 billion euros. The number of employees will go up by at least 2% in 2008, which will bring in to the Budget an additional revenue of 180 to 200 million euros. The only sums to be transferred from the State Budget will come from the VAT and excise duties, being estimated at 400 to 500 million euros. Vosganian also says that the government does not rule out another potential increase, budget permitting. At the same time, the Minister will come up with a 3-year Budget version in September, which provides for an increase in the pension point of up to 45% of the average gross salary by 2010.
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