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Parties divided over reform

Cabinet ready to take on pensions without ČSSD

By Victor Velek
Staff Writer, The Prague Post
December 19th, 2007 issue

It is now looking more likely that the government’s planned pension reforms may be drafted and passed without the approval of the opposition Social Democrats (ČSSD).
The cross-party committee established in July to draft a consensus version of the reform is still divided over several essential issues, prompting Labor and Social Affairs Minister Petr Nečas (Civic Democrats, ODS) to consider unilateral action.
In November, Nečas announced that if the committee didn’t reach an agreement by the end of this year, the pension reform — one of the signature items on the government’s reform agenda, along with revamping health care and the passed public-finance reforms — would be drafted by the governing coalition alone.
Nečas repeated this threat in a Prima TV debate Dec. 16, adding that due to the rising inflation rate, the pension system might sink into the red by 2010, seven years earlier than expected. The reform should make the pension system, which is increasingly frail due to an aging population, sustainable.
The current impasse comes on the heels of what seemed like genuine progress in late November, as the ČSSD and coalition parties announced that they had reached a compromise on 8 out of 12 points of the reform’s first stage (though the Communists agreed only on one point).
However, it now appears the collaboration has gone as far as it can.
“We have proposed compromise versions of the points at issue but won’t accept any [further] changes diluting the reform,” said Jiří Sezemský, spokesman for the Labor and Social Affairs Ministry. Some recent steps taken by the ČSSD have brought negotiations back to square one, he added.
In a resolution issued Dec. 15, ČSSD leaders criticized ODS proposals that raised the possibility of opting out of the pension system, which the government has planned for the reform’s second phase.
The coalition has made changes to the first reform stage, preparing the ground for capital pension funds. If introduced, this would lead to a shortage in the system backing current pensioners, the ČSSD says.
The Social Democrats are also against the extension of the compulsory period of insurance payment from 25 years to 35 years and changes in the disability pension system, among other issues. They are also bidding for a slower rise of the retirement age, which will be set at 65 years.
Sezemský says the ministry is skeptical that it will reach a full agreement with the ČSSD by the year’s end, adding that the ministry is no fan of extending the talks. The ministry would like the bill to be approved by the government in the first half of next year, he said.
“We cannot negotiate about this overdue reform forever,” he added.

Victor Velek can be reached at vvelek@praguepost.com


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