Romania's Parliament passes controversial pension law

Romania’s Chamber of Deputies on December 19 passed the controversial pension law with 193 votes for, one against and 14 abstentions. The ruling coalition, made of the Social Democratic Party (PSD) and the Alliance of Liberals and Democrats (ALDE), which no longer holds the majority in the Chamber, received support from the ethnic Hungarians’ Party UDMR after accepting some amendments, local Mediafax reported. The main opposition parties, namely the National Liberal Party (PNL) and Save Romania Union (USR) will challenge the law for breaching the Constitution, USR president Dan Barna announced. He accused the PSD-ALDE coalition of selling false illusions to pensioners, but he did not specify exactly on what grounds will the opposition challenge the law to the Constitutional Court. One possibility is questioning the preliminary impact on the public budget, which any law must include in the documents sent to lawmakers along the text of the bill. Separately, under the pension law, the benchmark used for calculating individual pensions will rise as of September, versus January under the provisions prevailing at this moment. The new pension law will thus ease the Government’s financial burden for 2019 while being detrimental to pensioners (therefore unfair, compared to the constant promises voiced by the ruling coalition) -- but this might not breach in itself any constitutional provision. The new pension law will increase the state’s pension expenditure by RON 8.4 bln (EUR 1.8 bln) compared to this year’s estimated level. The impact will be much higher in the following years. Investors’ association questions sustainability of Romania’s pension law draft editor@romania-insider.com (photo source: Facebook / Parlamentul Romaniei - Camera Deputatilor )