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Gaspari Says Pension Reform a Must

Ljubljana, 11 September (STA) - Development Minister Mitja Gaspari is convinced that the government cannot backtrack on pension reform. If the reform is not implemented, Slovenia's public finances will find itself in a $catastrophic situation for which nobody will want to be responsible$, he told Saturday's daily Delo.

"Without the reform, the public deficit will rise by one percentage point every year," Gaspari said in an interview with Delo's supplement Sobotna priloga.

If the current trends continue, the pension system alone will contribute an additional 23 percentage points of GDP to the country's public debt by 2023, he said.

Separating the growth of pensions from the growth of wages is an urgent measure with long-term effects which does not favour any specific population groups. "The trade unions' demand to leave things they way they are is unacceptable."

Next year the budget deficit will have to be decreased from 5.5% of GDP to about 4% if "we want to push it below 3% by 2013", he noted.

The minister also believes that changes will be required in the system of supplementary voluntary health insurance. The existing system is unfair because everyone is paying the same premiums, while a fair system would consider people's income. However, in that case social security contributions would have to be capped upwards.

Gaspari hopes that after the agreement the government has reached with the doctors' trade union FIDES, the health system will get a shake-up. He said a review of the efficiency of the Health Insurance Institute (ZZZS) would also be necessary.

Commenting on the row with doctors over standby bonuses, Gaspari said that talking "about what pay will doctors get for standby duties - this is like talking about the arrangement of chairs on board the Titanic".

Gaspari also questioned the need for a capital increase at the country's biggest bank, NLB, on which the bank's shareholders are to decide on 25 November. Why does the bank need another EUR 400m capital increase two years after it got fresh capital, the minister wondered, adding that the bank's strategy did not justify this.

Regarding the problems of companies such as builder Vegrad, the minister primarily blames the management but thinks that the state should also do more through the PDP restructuring fund. "It could gather small creditors and get them to put forward an alternative restructuring plan to that of the old management and exclude the management from the running of the company."

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