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| MORE MONEY FOR PENSIONERS (5.10.2007) |
| (2007-10-05) |
| Last updated: 2007-10-08 17:00 EET |
The increase in pensions, announced for January 1st 2008, will come into effect two months earlier than expected, Prime Minister Calin Popescu Tariceanu announced on Thursday, without saying how much pensions will actually increase. One of the explanations for this decision, according to the Prime Minister, is his cabinet’s concern for social problems:
“This measure is based on the need to help this social category with low incomes without disturbing the macroeconomic balance and this year’s budget. We have a budget surplus this year and we have decided to use these funds to help pensioners.”
Tariceanu claims the pension increase, made earlier than scheduled, will give a strong message to those who say that the increase is not covered by the budget. On September the 10th, the Social Democratic Party, the main opposition party, announced its intention to propose a draft law stipulating exactly the same measure. The Tariceanu cabinet later survived a motion of no-confidence also initiated by the Social Democratic Party, which accused him, among other things, of the disastrous management of social programmes. The next confrontation between the government and the opposition will be over the 2008 budget, which needs to be passed by the deputies by the end of the year. The pension increase, complemented by the increase in state aid for heating, is undoubtedly part of a package of measures meant to appease the Social Democrats, whose votes are decisive in the passing of laws.
Despite the significant increase which has been promised, Romanians’ pensions still do not reach the levels seen in the European Union. With an average pension of 100 euros, Romanians are far below the levels in the Czech Republic, where pensions stand at around 300 euros. Moreover, the pensioner-to-tax-payer ratio in Romania, a country with 5.5 million pensioners, stands at 1 to 1. This means that every employee supports one pensioner, though the ideal ratio would be 2.6 tax payers to 1 pensioner. Under the circumstances, in order to prevent the collapse of the public system, the authorities are trying to embrace reform, by introducing private pensions, unknown to Romanians before 1989.
(Valentin Tigau)
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