President Pavel Signs Amendment To Pension Indexation Into Law
Pavel said on Wednesday that the Constitutional Court must assess the pension amendment, and that if the opposition did not bring the case there, he would do so himself. Photo credit: Petr Pavel, via Facebook.
Prague, March 16 (CTK) – Czech President Petr Pavel today signed the controversial government amendment lowering the extraordinary June indexation of pensions, his spokeswoman Marketa Rehakova told CTK.
Under the government amendment, the average monthly pension will grow by 760 crowns in June, instead of the proposed 1,770 crowns. The government justifies the amendment as part of its efforts to stabilise public finances this year and in the coming years. The lower indexation will save CZK 19.4 billion in government spending on pensions.
The opposition says the government is taking money away from pensioners, and plans to file a complaint with the Constitutional Court, on the grounds that the amendment was debated in parliament during the state of legislative emergency, and because it seems to have retroactive effect.
Pavel said on Wednesday that the Constitutional Court must assess the pension amendment, and that if the opposition did not bring the case there, he would do so himself.
Pavel said he can understand the opposition’s objections that the government had pushed through the amendment in an anti-constitutional manner, both due to its retroactive effect and the use of legislative emergency. “It was really used in a dubious way in this case,” Pavel said.
However, he is also of the view that the government is right to reduce the June indexation. “The government’s arguments, as well as the arguments of economic experts, explain clearly that it is necessary to slow down the rise in pensions in the current situation,” Pavel said.
He raised objections to the government not having communicated the change in the pension indexation sufficiently. He also said that the government did not include the money for the extraordinary pension indexation in the state budget, despite having been repeatedly warned to do so.
If Pavel had vetoed the amendment, the Chamber of Deputies would probably not have managed to outvote his veto in time. The cabinet points out that the legislation must be promulgated in the Law Digest by 22 March, the deadline for the release of the government decree on the June indexation of pensions.
The lower indexation will cost the state CZK 15.4 billion this year, rather than the CZK 34.4 billion envisaged by the original proposal. According to the Czech Fiscal Council, lowering the extraordinary June pension indexation would reduce the growth of state expenditures by roughly CZK 250 billion between now and 2030.