Opposition battles IMF green light for pension shake-up law

Romania’s Parliament has voted to increase the age of retirement to 65 years and limit the deluxe pensions given to privileged members of state staff – in a package of pension reform laws patronised by the International Monetary Fund (IMF)

October 2010 - From the Print Edition

However the opposition Social Democratic Party (PSD) and National Liberal Party (PNL) boycotted the vote and have filed a complaint to the Constitutional Court to overturn the law.
The IMF has heralded Romania’s attempts to reform its pension law, which is seen as part of Romania’s requirements under the terms of its ongoing 13 billion Euro loan from the international financial institution.
But due to the legal threat to the law, Mihai Tanasescu, Romania’s IMF representative, told The Money Channel that if the Romanian Constitutional Court states that the pension law is unconstitutional, the IMF could reopen the negotiations with Romania regarding the continuation of granting its ongoing loan.
Romanian presidential spokesperson Valeriu Turcan added that the “political immaturity” of the opposition’s move to block the law could “seriously cost” Romania.
“The country could lose its credibility on the international financial markets if it fails to fulfill the assumed obligations,” he added.
The adoption of the pension law will also be vital if Romania intends to take out a second loan from the IMF in 2011.
After three rounds of voting, the Deputies adopted a joint stance to gradually increase the retirement age for women from 57.5 years and men from 63 years to 65 years for both sexes between 2015 and 2030.
Deputies have sought to eliminate ‘special’ topped-up pensions to privileged state workers and integrate these with all workers in a clear and unified pension structure. The majority of MPs agreed that persons who receive a supplementary income, other than a salary, must contribute to the public pension system.