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Italy can't break pact for pension - EU

Italy can't break pact for pension - EU

Court ruling could require billions in repayments

Brussels, 06 May 2015, 13:52

ANSA Editorial

ANSACheck

(see related) European Union sources said Wednesday that Italy must not break the EU Stability and Growth Pact to fix a hole in its budget created a court ruling on a pension cap. "Brussels will wait for the decision of the government on this, to implement the Constitutional Court's ruling and it will assess the impact on the accounts," the sources said.
    "This must not compromise Italy's commitment to respecting the rules of the Pact," the source said.
    "The sustainability of the accounts must be a priority, including in the light of the high pension spending". Last week, Italy's Constitutional Court ruled the national government cannot change pension payouts as had been set out in 2011 measures.
    The aim of the measures announced in 2011 by the emergency technocrat government of ex-premier Mario Monti was to "equalize" high pensions by suspending some inflation indexing so as to save - by some estimates - about 1.8 billion euros in 2012 and three billion euros in 2013. The measures were to affect only pensions greater than three times the minimum pension provided by national agency INPS. The plan came during a very low point in the Italian economy, which was plagued by recession and very high interest rates. Still, those pension measures suspending inflation indexing were unconstitutional, the court ruled last Thursday in rejecting article 24 of the 2011 decree.
   

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