Wednesday, October 7, 2009

Romanian govt seeks confidence vote on pensions

By Ioana Patran

BUCHAREST, Oct 6 (Reuters) - Romania's minority government called on Tuesday for a parliamentary vote of confidence, in a test of the opposition's support for IMF-prescribed pension reforms before a November presidential election.

The cabinet of centrist Prime Minister Emil Boc also faces a separate confidence motion filed by the opposition, following a sudden split of the centre-left coalition last week.

No timing has been set for either of the votes.

'This is a tactical approach to stress government ownership of anti-crisis reforms,' said one senior parliamentary official. 'And to see whether the opposition can openly say it opposes reforms aimed at improving Romania's recovery efforts.'

The pension bill, which streamlines pension regulation and raises the retirement age to 65 by 2030, is one of the conditions set by the International Monetary Fund in return for 20 billion euros ($29.45 billion) in aid. It needs to become law this year. The current retirement ages are 58 for women and 63 for men.

Pensions and wages are expected to top the agenda for the hotly-contested presidential poll.

The bill faces stiff opposition from some public sector workers such as judges and police who currently get preferential pay, and from trade unions which oppose a higher retirement age.

If it fails, Romania risks losing some of the international aid, vital for maintaining investor sentiment and its ability to finance a growing budget deficit.

Last week's break-up of Boc's centre-left coalition after less than a year put into question Bucharest's ability to meet fiscal targets and pursue reforms required by the IMF.

Boc sought to reassure markets that reforms were on track.

'This represents a commitment of the government towards Romanians and international bodies,' Boc said after a cabinet meeting. 'Even if some measures are tough, they are healthy for the public pension system,'

Romania has one of the highest proportions of pensioners in Europe, with 4.9 million employees supporting a budget that funds around 6 million retired workers.

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