This year’s social insurance budget will cover the payment of pensions, minister says

Romania’s social insurance budget is large enough for this year’s pensions to be fully paid yet next year funds from the state budget will be needed as the pension point will rise to 45 percent of the gross average salary, Labor Minister Paul Pacuraru said.

The official explained the funds collected so far to the social insurance budget and forecasts show no money will be needed this year from the state budget for the payment of pensions.

The value of the pension point grew from 416 lei (126 euros) to 541 in November 1, 2007. A second increase took place in January this year, when the pension point rose to 580 lei.

Last year President Traian Basescu said that the 2007 social insurance budget has a surplus of 465 million euros, yet this will dry up in 2008 owing to the increase in pensions.

The president added a 1.6 billion euro deficit will be recorded next year while in 2009 this will increase to 4.5 billion euros. In 2010 the deficit should stand at 4.9 billion euros and will reach 5.6 billion in 2011.

Economy and Finance Minister Varujan Vosganian earlier this month said Romania will see a balanced social insurance budget starting next year and until 2017 after which a surplus is expected.

The official noted between 2017 and 2020 the social insurance budget should exceed estimates. Vosganian emphasized the sums collected to the social insurance budget this year will cover the funds needed for the payment of pensions.

The minister stated on January 14 this year the increase of pensions threatens this year’s budgetary balance. Vosganian said the ministry he runs will transfer 1 billion euros from other areas for the payment of pensions.

NewsIn