Romania pension cut ruled illegal
- 25 June 2010
- From the section Europe
A top court in Romania has ruled out a pension cut demanded by the country's government as part of a deficit-cutting financial austerity measure.
The government wanted to cut state pensions by 15%, as well as slashing wages and welfare allowances.
But the Constitutional Court said the pension cut was unconstitutional, a ruling which cannot be appealed.
Romania wants to cut spending to qualify for a $20bn loan from the International Monetary Fund.
That may now be delayed, and this will be a big blow to the government of Prime Minister Emil Boc, the BBC's Nick Thorpe reports.
The court decision came after dozens of people tried to force their way into the presidential palace to get an audience with President Traian Basescu.
Riot police repelled them from the palace.
The court did not publish its reasoning behind the ruling, but unions say pensions partly funded by worker contributions to are protected by the constitution.
The austerity plan negotiated by the government with the IMF aimed to cut the national deficit from 7.2% of output to 6.8%.
Ministers hoped to achieve that by cutting pensions by 15% and wages by 25%.