Romanian PM not sure anymore about 40% pension hike in September

The 40% increase in public pensions scheduled to take place on September 1, under a law voted by the Parliament and promulgated by president Klaus Iohannis last year, is “not 100% sure”, Romania’s prime minister Ludovic Orban said in an interview with Hotnews.ro.

He also said that the social expenditures including the doubling of child allowances (also promulgated by president Iohannis) are uncertain and depend on the revenues to the budget.

His statements prepare the ground for scaling down the pension and child allowance hikes in line with the resources, a move that bears significant electoral cost but would secure macroeconomic stability.

“No decision that will affect the evolution of the long-term economy will be taken,” PM Orban stated. The higher pensions would cost the budget RON 16 billion (EUR 3.33 bln) and doubling child allowances would cost another RON 6 bln (EUR 1.5 bln), he stated.

Orban blamed the former Social Democrat Government for messing up the pension law and deliberately doubling child allowances “out of revenge” after the overthrow of the cabinet of prime minister Viorica Dancila.

“The money [for the higher pensions] is included in the budget, but it all depends on how the economy evolves, if we manage to secure robust economic trend, a consolidated economic growth, to relaunch the investments and improve tax collection”, he added.

Separately, finance minister Florin Citu explained that the RON 24 bln (EUR 5 bln) supplementary cost of the pension hike have been included in the budget, but he also stressed that the actual budget expenditures depend on the collected revenues.

(Photo: gov.ro)