LabMin Budai: Romania is not in economic crisis; pension budget to be on surplus by year's end

Romania is not in an economic crisis, and by the end of the year the pension budget will show surplus, Labor Minister Marius Buda said on Monday.

"I refuse to answer this question when Eurostat says that we have a 5.1pct growth in Romania in the first quarter. I repeat for the second time, we are not in a crisis, and I am not the only one telling you this, but also Eurostat and the National Institute of Statistics. The money [for increasing pensions] will come from revenues and from the fact that, from our calculations, we will have surplus in the pension budget at the end of the year. The deficit from the Pension Fund has decreased from around 18 billion in 2017 to 4.2 billion in 2018, by increasing the revenues to the state social security budget, by transferring the contributions and by raising the salary. If at the beginning of the year we had over 230,000 jobs created, we now have over 250,000. The salary mass has risen in Romania, which means that the revenues have increased as well, so we are in a dynamics that demonstrates that we have that money envisaged in the budget," Marius Budai said at private TV broadcaster Digi24.

The Labor minister said that the reform of the pension system will begin on 1 October 2021.

He rejected the populist accusations brought to the Pension Law.

"We are now at 6pct of GDP in terms of influence of pension payments in GDP. In the European Union, the average is over 12pct: 12.4pct, 13pct, so we are at over twice times lower in terms of pension expenditure of GDP. We need this increase, it is not a populist measure. I refuse to believe that the increase in the incomes of our parents and grandparents would be populism. (...) Romania's public debt is 34.9pct of GDP, and the EU average is 83pct of GDP. So we are much below than the National Bank's alert threshold of 45pct and well below what the Maastricht Treaty stipulates: 60pct," the labor minister added.

President Klaus Iohannis signed on Monday the Decree on the promulgation of the Law on the Public Pension System passed by the Chamber of Deputies on 26 June in a re-examined form, following the Constitutional Court's decision