Romanian PM Advocates New Pension Law To Make System Sustainable

Boc said the Government currently treansfers EUR1.7 billion from the state budget to the social security budget to pay pensions. He explained this sum will reach an unaffordable EUR4.6 billion if the pension system is not reformed.

The prime minister said the deficit triggered by pension spending will rise to 6% of the gross domestic product, from 3.1%.

Boc attended debates in the Senate on the country’s pension bill, after senators decided Monday the bill will be the first item on Tuesday’s work agenda.

The Senate decided Monday evening with 48 to 43 votes and two abstentions to invite Boc to participate at debates on the pension reform.

Romanian President Traian Basescu also summoned the Government Tuesday for talks on issues regarding public spending, absorption of European funds, public procurement legislation, the revision of the country’s Constitution and the decentralization of state institutions.

According to the presidency, talks will be held at the Cotroceni Palace on Tuesday starting 2 p.m..

Romania must adopt a new pension law, as it pledged to cut public spending and reform its pension system under an IMF-led international bailout package of nearly EUR20 billion.