May 25 (SeeNews) - Romania's government will hike pensions as of September 1, finance minister Florin Citu said.
"We are looking at all expenses with responsibility and we will consider the best solutions for the people's well-being," Citu said evening during a talk-show broadcast by local TV station Realitatea Plus of Friday evening.
Citu did not say what the increase will be but noted that the finance ministry will submit several scenarios and risks related to each of them to the Liberal government, emphasizing that in the end, a pension hike by 40% will be a political decision.
A law for increasing pensions by 40% was drafted by the previous Social Democrat government and adopted by parliament in June 2019.
The European Commission, international lenders and credit rating agencies have warned Romania that increasing pensions will deteriorate its public finances even further.
"The long-term sustainability of Romania’s public finances was already at risk prior to the Covid-19 outbreak, as a result of high budget deficits and the projected significant rise in ageing costs, in particular pensions," the Commission said on Wednesday in its 2020 country-specific recommendations on Romania, which are part of the European Semester Spring 2020 Package.
At the beginning of May, Citu said that the government is not planning any tax hikes to cover a rising budget deficit amidst the coronavirus pandemic.
In April, the finance ministry said that Romania's consolidated budget deficit will rise to 6.7% of GDP this year, up from original projections for a gap of 3.59%, due to additional expenses related to the coronavirus crisis.
(1 euro = 4.8422 lei)