Brussels, 26/08/2010 (Agence Europe) - The idea of including the cost of pensions reforms in calculating deficits does not enjoy the support of the German Chancellor, who says that she is “very reluctant” to agree to developments of this kind in the Stability and Growth Pact (SGP). “I feel that this is a very difficult discussion, which could end up weakening the Stability and Growth Pact. This is the opposite of what we need now”, explained Angela Merkel, who would prefer work to focus on changing the Treaty in such a way as to increase penalties in the event of infringements of the SGP. The Chancellor was speaking on Wednesday 25 August on the sidelines of her meeting with the Slovakian Prime Minister Iveta Radicova, whose country does support an innovation of this kind.
In early August, the finance ministers of nine member states (Bulgaria, Hungary, Latvia, Lithuania, Poland, the Czech Republic, Sweden and Slovakia) wrote to the president of the European Council, Herman Van Rompuy, and to the commissioner for economic affairs, Olli Rehn, calling for the cost of pension systems reform to be taken into account in calculating the budget and deficits. They argue that the current rules are “highly dissuasive” to reform and penalise those countries which have restructured their pension regimes, in some cases preventing them from meeting the convergence criteria. Those who have kept their distribution pension systems, however, can present more advantageous figures, even if the sustainability of their public finances is in fact under threat, they continue.
The issue will be discussed in the framework of President Van Rompuy's working group on economic governance, which will meet next on 6 September. (A.B./transl.fl)