Troika discusses pensions reforms with MPs, employers, unions

Page created: Wednesday, 26 February 2014 10:54 GMT

Pensions  Reforms  Troika

Officials from the three institutions overseeing Portugal’s euro-zone bailout are on Wednesday meeting first with members of parliament and then with employer organisations and trade unions, as part of their 11th regular review of the country’s progress in implementing the terms of the funding deal.

Representatives of the ‘troika’ of International Monetary Fund, European Commission and European Central Bank are in the morning testifying before the parliamentary committee set up to monitor Portugal’s economic and financial assistance programme. In the afternoon, they are to meet employers and union leaders.

Among issues to be discussed are reforms to the pensions system, with a view to identifying permanent measures that can ensure its sustainability.

Portugal’s Constitutional Court last month struck down government legislation aimed at bringing public sector pensions into line with the general system, saying that the measure was too ad hoc and that reforms would need to have a more consistent design. The measure would have cut public sector pensions by 10% and as a result of the court decision the government had to seek alternative savings to keep its budget-cutting efforts on track, including increases in the healthcare contributions of public sector employees.

According to a letter of intent signed by government officials and the governor of the Bank of Portugal, and released by the international institutions along with their report on the 10th bailout review, the government “is developing new far-reaching measures as part of the structural reform of pensions underway” after the court decision.

Other issues to be discussed during the current bailout review are means of limiting future increases in electricity prices, and measures to “encourage wage flexibility” and reduce incentives for workers to resort to the courts if they are sacked.