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Pensioners. What they get and what they deserve to get

0f8216e43dd1258c148de8e9da58fa02.jpgDuring the first half of December the word pension must have been a curse word in Lithuania’s parliament Seimas. When opposition came up with the idea to restore pensions to the pre-crisis levels a small fuss in the beginning simmered into a great quarrel at the end, where everybody had an opinion, but no one had a solution.
It all ended at the plenary session on the 7th of December, where 64 parliament members voted FOR the restoration. However, it was not enough, because 33 were against and even 37 abstained. Seimas did not increase the pensions.

This was no easy decision. Why? Because there was no right one. The parliament knows that the pensioners are living in the levels of poverty and misery that are intolerable. However, younger people do not want to take the burden on their shoulders either. The only way the pensions would have been increased is by borrowing; and nobody wants to live in debt (which is high enough already).

Blaming the 2007 and 2008
Probably the most vivid advocate of not increasing the pensions was the Finance Minister Ingrida Šimonytė. She even claimed that she would resign if the pensions would be increased. According to I. Šimonytė, the main problem is: “that during the years of 2007 and 2008 the pensions were increasing not by a couple percent but by tens and tens percent. It’s obvious that with the economic decline it was not possible to persecute these commitments.”

Prime Minister Andrius Kubilius agreed with Šimonytė and added that “if pensions would be increased it might a have a potential to destabilize Litas”.

President Dalia Grubauskaitė also was on the same side of barricades. She commented that “such suggestions from the opposition are without competence and even economically criminal”. European Commission had the same opinion.

600 million short
The restoration of pensions to the pre-crisis level would cost about 600 mln Lt from the budget. However, such funds were not appointed. Even though, opposition suggested that the money could be acquired by selling state property and the immovable property tax, Seimas was not convinced.

I. Šimonytė joked that money is not mushrooms that grow under trees and one cannot just go to the forest and pick them. “It is not easy, especially during economic decline, and it always surprises me when someone asks: “can’t you find money?” – commented the Finance Minister.

The Ministry of Social Security and Labor had counted that, if the pensions would had been increased the average wage of Lithuanian worker would become about 42 Lt lower, because the deposits for “Sodra” (State Social Insurance Fund Board) would have to be increased by 2%.

Lowered pensions will be compensated
Prime Minister Andrius Kubilius reminded the opposition that the government has accepted the obligation to compensate the lowered pensions when the financial situation of the country will be stable. This should happen in 2012, according to most economists. But is it soon enough? Pensioners need their money today. And though it may sound cynical, but some of them might not live long enough to get their compensations.

EBN Reporter Edgaras Savickas