Romania Strongly Relies On Country’s New Pension Law To Pay Public Pensions- PM

Boc stressed, however, that the state currently has enough funds to pay pensions in 2009 and 2010.

Boc stressed the country’s new pension law is highly necessary to avoid a potential collapse of the public pension system, adding that nearly EUR1.5 billion are currently taken from the state budget to fill the gap in the social security budget and pay pensions.

„If we sit and do nothing, Romania will have to pay pensions only from state budget funds,” Boc said.

Boc said earlier Tuesday the government will seek a confidence vote in Parliament to enact and IMF-required pension law which will increase retirement age and eliminate special pensions, such as those of lawmakers, magistrates, military, law enforcement and intelligence services staff.

The Government has pledged to reform its public pension system by December under an IMF-led EUR19.95 billion financial rescue package.

Under the draft pension law, all special pensions will be integrated in the public system and will be recalculated depending on people’s contributions, which means they will be reduced.

Boc said he is ready to put his job on the line and will resign if the pension bill doesn’t go through.