Romanian PM Assures Budget Can Sustain Pension Payments This Year And The Next

Tariceanu added the situation is under control, although some deficits might occur.

The government said in a statement that the prime minister wishes to contradict information in the media claiming the budget can’t sustain pensions.

"Considering the pension fund is part of the general consolidated state budget, there is no question of it being incapable of ensuring payments. Things are under control," Tariceanu said.

He added that deficits in the pensions budget might arise at certain points and pensions are not covered by contributions alone in European Union states either. Tariceanu gave the example of Belgium, where 50% of pensions come from the state budget, the Czech Republic – 58%, Germany – 20% and Denmark – 10%.

According to Tariceanu, pension expenses in Romania amount to 6.3 % of gross domestic product, while Poland spends 13.59% of GDP, Hungary – 9.5%, Germany -11.8% and Denmark – 10.8%.

Romanian President Traian Basescu said Monday evening on Realitatea TV that the country’s pension fund lacks the money to cover pension hikes that started in 2007 and continued in 2008. He added that EUR1.3 billion would be needed from the state budget in 2009 for pensions.

The president later said he does not want people to understand that there would be no money for pensions next year.