ZAGREB, July 13 (Hina) - Croatia's Labour and Social Welfare Minister Davorko Vidovic on Thursday told parliament's House of Representatives the government's basic objectives in drafting a pension increase law were to improve the
social position of pensioners, right injustices, and find socially and economically sustainable solutions. Earmarking for pensions have exceeded 14 percent of Gross National Product, which is frightening and threatens to undermine the entire economic and social system, said the minister. The employed-pensioners ratio is 1.3 : 1, he said, adding West European countries called for radical system reforms when the ratio drops to 3 : 1. Vidovic said it did not happen in Croatia yet because the former government solved economic problems by sending workers into retirement en masse. This did provide social care for a substantial number of people, but one of a very low level,
ZAGREB, July 13 (Hina) - Croatia's Labour and Social Welfare
Minister Davorko Vidovic on Thursday told parliament's House of
Representatives the government's basic objectives in drafting a
pension increase law were to improve the social position of
pensioners, right injustices, and find socially and economically
sustainable solutions.
Earmarking for pensions have exceeded 14 percent of Gross National
Product, which is frightening and threatens to undermine the entire
economic and social system, said the minister.
The employed-pensioners ratio is 1.3 : 1, he said, adding West
European countries called for radical system reforms when the ratio
drops to 3 : 1.
Vidovic said it did not happen in Croatia yet because the former
government solved economic problems by sending workers into
retirement en masse. This did provide social care for a substantial
number of people, but one of a very low level, he said, reminding the
age for retirement had dropped to 53.
The minister said the former government transferred the burden of
its failures onto pensioners, bringing them into an unfavourable
and unequal position by suspending a pension adjustment law which
the Constitutional Court declared anti-constitutional in 1998.
Despite the difficult economic situation, the government decided
to right those injustices and return the debt owed pensioners with
money and not bonds or shares as some had suggested, Vidovic said.
The government has suggested increasing pensions earned by the end
of 1997 by 14-20 percent, thus giving 700,000 pensioners who earned
pensions by 1994 another 2.4 pensions each year.
Over the next ten years, it is necessary to ensure 22.7 billion kuna
(US$2.84 billion) for the adjustment of pensions, which is the
maximum the government can endure, the minister said.
He added there had been demands to increase pensions even more,
requiring another between 36 and 42 billion kuna, a sum which would
have incalculable economic, social, and political consequences.
Representatives of the Croatian Democratic Union (HDZ) assessed as
incorrect claims that the pension system had started breaking down
in 1994 or that the former, HDZ-led government was responsible for
sending people into early retirement.
(hina) ha mm