Romania's Government passed an emergency ordinance (OUG) by which the full implementation of the Pension Law, passed by the lawmakers in 2019, is deferred from September 2021 to September 2023, Digi24.ro reported.

"This law enters into force on September 1, 2023," according to the OUG. The National Liberal party promised an 8.1% pension hike as of January 2021 in its electoral strategy - and not in the governing strategy, prime minister Florin Citu explained at a press conference dedicated to the 2021 budget planning on February 10.

"The additional effort is already RON 8 billion," PM Citu said, citing the extra expenditures prompted by the 14% pension hike operated by the Liberals last September, before the general elections.

Separate from the Pension Law provisions, the pensions will be indexed on an annual basis to headline inflation plus a portion of the real wage gain that can not exceed 50%.

Romania's Government is looking to freeze public expenditures and bring down the budget deficit, which is estimated at 7.1% of GDP this year.

Between 2016 and 2020, the spending on public wages and social assistance (public pensions mainly) doubled from RON 56 bln to RON 110 bln (EUR 22.7 bln), PM Citu pointed out.

(Photo: Jeanette Teare/ Dreamstime)

andrei@romania-insider.com