Pension Reform Plan Encounters Opposition in Croatia

As Croatia's government announces stricter rules for the state's ailing pension system, both pensioners groups and experts have warned that the announced changes will not resolve the key issue - the unhealthy ratio between working people and pensioners.

With only 1.16 workers for every pensioner in Croatia, the government plans to tighten the rules on people taking early retirement to stop the ratio from getting worse.

Last year, Croatia paid out pensions costing about 4.9 billion euros while working people paid only 2.7 billion euros towards contribution for retirement. The state budget covered the gap.

Now the government wishes to further penalise people taking retirement before the age of 65, possibly lowering their pensions by 30 per cent instead of the existing 20 per cent.

Also, noting the introduction of new technology and better security and protection at work, the government wishes to cut around 100 job categories in which employees have an opportunity to retire at a younger age. These include police officers, firefighters, workers handling hazardous chemicals and similar jobs.

Milan Tomicic, deputy president of the Croatian Pensioners Union, told BIRN that the union was dubious about the announced reforms, as previous ones did not resolve anything, "but just further worsened the issue".

He said the union was firmly against stricter criteria for early retirement. "I don't see how these stricter conditions will ease the unfavourable ratio between workers and pensioners … it [changing the ratio] should be done through new jobs," Tomicic concluded.

Economic analyst Guste Santini agreed that the planned measures will not help Croatia turn round the unfavourable ratio, or find new money.

"The government must not...