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Prime Minister Ludovic Orban said on Monday that pensions will increase because the necessary amounts are earmarked in the state budget, but that whether child allowances will rise depends on the available financial resources, because the budget deficit must not be affected.
"We will increase the pensions, we'll raise child allowances. The amounts required for increasing pensions have been earmarked under the Law on the state social security budget and the State Budget Law. We can afford increasing allowances provided that the financial resources exist to support this increase, without affecting the budget deficit, but child allowances will increase for sure, and we will definitely raise pensions," Orban said at the Palace of Parliament.
He was asked if pensions will rise by 40 percent starting in September, given that central bank governor Mugur Isarescu said that only a 4 percent increase is possible.
"Mr. governor said that it is difficult to raise pensions by 40 percent when the country's economic growth is 4 percent and, obviously, any quantum-related decision - on public sector wages, pensions, child allowances, special aids and other categories of benefits - must be based on economic reality. (...) For example, look at the discrepancy between public and private sector wages. This situation, where the average wage in the public sector is higher than that in the private sector is nowhere to be found in any other European country."
Asked if pensions and allowances could be raised gradually this year, the Prime Minister said that "any" decision can only be taken after examining the evolution of the economy in the first six months.
"If you look at the law on fiscal-budgetary accountability, after six months of rule, the government is required to present a report on the economic and budget developments to substantiate the budget correction. (...). The Social Democratic governments have never presented this report they had the legal obligation to come up with after six months of activity. Our objective is clear, specifically to increase all the incomes of Romanians, to raise wages in the private milieu, increase salaries, pensions, and allocations, but this growth must obviously rely on a stable, solid economic growth based on investments, productivity growth, the application of innovation and research in the activity of companies, enhanced competitiveness of Romanian companies on global markets, the development of companies on regional and global markets, that is to say, on genuine economic development, not increases on paper that only result in inflation and which cannot be sustained in the long term," Ludovic Orban concluded.
