Romania’s Ruling Party VP Says Differentiated Taxation Of High Pensions Not A Good Solution

Romania’s ruling Democratic Liberal Party vice-president Ioan Oltean told a press conference Saturday that, as the Government rejected the opposition social democrats’ idea for differentiated taxation of high pensions, it means this clearly isn't a good solution.

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Oltean made these statements Saturday after having talked for almost an hour with dozens of pensioners who blasted the Government for the fact that it is not open to various solutions, other than salary and pension cuts.

Oltean underscored that the Government wants salary and pension cuts to be temporary and scrapped as of January 1, 2011, especially pension cuts. He added that the Government does not want to hurt Romanians in any way and that its austerity measures are only meant to help the country overcome the harsh economic and financial situation it faces.

Romania's opposition Social Democratic Party head Victor Ponta told a press conference Friday that if the country's social security budget does not have enough funds to pay high pensions, then, it would be fair to resort to differentiated taxation of high pensions, throughout the period of economic crisis.

According to Ponta, most laws whereby pensions have been increased over the past years were voted by the country's Parliament, which also included democrat liberal Prime Minister Emil Boc and democrat liberal lawmakers.

Boc earlier this week sought the lawmakers' confidence vote for the country's austerity plan, which cuts social welfare benefits, pensions and public sector wages. Boc warned that Romania risks payment default unless it cuts budget spending. The austerity plan should help the recession-hit country bring its economy on track and convince the International Monetary Fund, which is leading a EUR20 billion rescue package agreed last year, to disburse further installments of the loan.

Boc is now facing a no-confidence motion, submitted against the two austerity laws by the social democrats. The standing offices of Romania's two chambers of Parliament decided earlier this week that the no-confidence motion will be put to the vote Tuesday, June 15, at 10:00 a.m..

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