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26 October 2011

WSJ: Berlusconi cuts a deal for pension overhaul


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Umberto Bossi, head of Italy's separatist Northern League, said he reached a preliminary agreement with Prime Minister Silvio Berlusconi about a key pension overhaul, as the country seeks to appease European pressure to accelerate the pace of its economic revamp.


The coalition discussed new steps to cut public debt and increase growth, including gradually raising Italy's retirement age while reducing some pension entitlements, greater efforts to fight tax evasion, and limited deregulation of parts of the economy. Mr Bossi and his top lieutenants have been in marathon talks with Mr Berlusconi over whether to adopt measures to supplement the Italian government's recent €60 billion austerity package. Germany, France and EU officials have called on Rome to announce measures aimed at trimming Italy's €1.9 trillion debt and boosting its stagnant growth before the EU summit set for Wednesday.

Mr Berlusconi has responded by pushing his cabinet to approve pension changes. Italians can retire as early as age 58 if they have worked for 40 years, a rule known as seniority. Mr Berlusconi, however, has floated the idea of setting Italy's retirement age as high as 67. 

Pension changes have proved particularly controversial given the strong opposition of the Northern League, which represents regions where residents are more likely to have contributed to the public-pension plan.

Full article



© Wall Street Journal


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