Monday, January 25, 2010

Romania govt to OK IMF-required pension reform in Feb

Sun Jan 24, 2010

BUCHAREST, Jan 24 (Reuters) - Romania's centrist coalition government will send a bill that streamlines its bloated pension system to parliament for approval on Feb. 3, key to unlocking international aid, Prime Minister Emil Boc said on Sunday.

A fiscal responsibility law to make budget spending more efficient -- equally important to Romania's 20 billion euros aid package led by the International Monetary Fund -- should be approved by the end of the first quarter, Boc said.

Romania was initially supposed to approve the two laws by the end of last year, but failed to meet the deadline due to a months-long political crisis that spurred policy deadlock and prompted the IMF to put the deal on hold.

"There are two major responsibilities: to adopt the fiscal responsibility law by the end of March and to adopt the law that aims to reform the pension system in the next parliamentary session," Boc told reporters on Sunday.

Boc, which met IMF representatives on Saturday, added the government will approve the pension bill in a Feb. 3 meeting.

The Fund has a review mission in Bucharest to assess the European Union state's progress and analysts widely expect it to unlock as much as 3.3 billion euros worth of IMF/European Commission loan tranches as early as February.

"We hope that the entire amount will come sometime during the last week of February," Mihai Tanasescu, Romania's representative to the IMF told television channel Realitatea TV on Saturday.

The fiscal responsibility bill, which the government passed last month and is pending parliament approval, enforces the cabinet's obligation to pass multi-annual budgets and limits the number of budget revision within a fiscal year.

As for reforming its pay-as-you-go pension system, Romania aims to index pensions to inflation rather than to average wages at present, raise the retirement age and scrap special pensions for so called "privileged" public job categories. (Reporting by Luiza Ilie; Editing by Diane Craft)

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