New version of Romania’s recovery plan omits 9.4% of GDP for pensions

1 year ago 34

Negotiations on the revision of the Recovery and Resilience Plan have come to an end but the new version of the plan no longer includes 9.4% of GDP for pension spending, Investment and European Projects Minister Adrian Câciu announced on Thursday.

Romania’s new version of its recovery and resilience plan (PNRR), which the Commission is set to soon look into, is expected to be adopted at the start of December, Câciu said.

“We estimate that this debate within the Commission will conclude around November 21-22, and the approval in ECOFIN is expected to take place at the start of December”, Câciu added.

Though the new version of Romania’s National Recovery and Resilience Plan no longer includes allocating money worth 9.4% of the GDP to the public pension system, the minister explained that a similar mechanism will nonetheless be added.

“The pension law encompasses various mechanisms, including indexation or correlation with the increase in contribution income. This braking mechanism, as required by the Commission and the original PNRR, is outlined in the pension law and underwent evaluation by the European Commission”, he explained.

While the European Commission has downgraded its estimates for Romania’s economic growth this year from 3.2% to 2.2%, Câciu claimed that this forecast does not consider the yet-to-be-adopted pension law.

He noted that the form of the pension law, expected to be voted on next week, had been discussed with both the European Commission and the World Bank.

Changes to the recovery plan have been necessary because Romania lost over €2 billion in grants due to the better-than-expected economic growth.

(Cătălina Mihai | Euractiv.ro)