Czech govt returns pension indexation to pre-austerity regime


09.04.2014 14:29

Prague - The Czech state will resume, as from 2015, the pension indexation regime that was valid before the present austerity regime the previous right-wing government introduced in 2012, the cabinet decided today, Labour and Social Affairs Minister Michaela Marksova Tominova told CTK.


Zleva místopředseda vlády pro ekonomiku a ministr financí Andrej Babiš a předseda vlády Bohuslav Sobotka před jednáním vlády, která zasedala 9. dubna v Praze. ČTK Krumphanzl Michal

Marksova Tominova (Social Democrats, CSSD) wants pensions to rise even more than the new indexation regime would require, by 1.8 percent, i.e. some 205 crowns a month instead of the expected 150 crowns.

The government will definitively specify the sum to be added to pensions in autumn.

Marksova Tominova wants pensions to be regularly raised by at least one-third of the growth of real wages and 100 percent of the growth of prices.

In 2012, the indexation regime was curbed by the then Petr Necas (Civic Democrats, ODS) government within its austerity measures aimed to keep the budget deficit below the planned limit.

This January, monthly pensions were raised by an average 45 crowns, in January 2013 by 137 crowns.

Marksova Tominova said this year the inflation may be low and real wages are not expected to grow excessively either. As a result, pensions would not rise much, and they would even decline in real terms, she said.

The return to the pre-2012 indexation regime would cost the state 5 billion crowns, and the proposed more generous raising of pensions 7.1 billion next year.

Finance Minister Andrej Babis (ANO) on Monday said he had incorporated the planned 205 crown increase in the draft 2015 state budget.

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