The management of public finances is defective, said former Prime Minister Ion Chicu, referring to the Gavrilița Government’s intention to increase the minimum pension to 2,000 lei. The ex-Premier believes that the insistence with which this bill is promoted shows that the current executive remains hostage to the electoral promises, IPN reports.
Under a bill proposed by the Ministry of Labor and Social Protection, which was already debated publicly, the minimum old-age pension as from October 1 will be 2,000 lei. Starting with October 1, the pensions will be indexed by 3.86%. According to Chicu, the current Government risks remaining trapped in debt if these raises are covered with foreign loans.
“The Government is hostage to the electoral promise to raise the minimum pension to 2,000 lei and therefore started to change the rhetoric by saying that only some persons will enjoy raises. The cost of the rise in the minimum pension is of 2.8 - 3 billion lei a year. At the current stage, they cannot identify this sum at internal level and will have to borrow money. This is not a rational decision in the management of public finances. We risk accumulating debts that will grow annually,” Ion Chicu stated in the talk show “Natalia Morari’s Politics” on TV8 channel.
Moreover, the ex-Premier said it would have been more judicious to offer financial support only to the older persons with modest incomes. Earlier, Prime Minister Natalia Gavrilița said the money needed to raise the minimum pension will be redirected from foreign sources. She then mentioned the US$236 million offered by the IMF and the €50 million in financial support provided by the EU.
“If the current Government considers it is good to borrow money for consumption, it is on their conscience. It can identify 700 million lei and offer by 1,000 lei to the almost 700,000 pensioners with pensions lower than 4,000 lei. It is more reasonable to offer support to persons who need it pressingly. After the minimum pension is raised, all the pensions increase hierarchically and there is a risk that this commitment will not be fulfilled and the indebtedness level can rise considerably soon,” opined Ion Chicu.
According to the Government, slightly over 500 million lei is needed to increase the minimum old-age pension for 2021. More than 475,000 pensioners will benefit from this raise.
