(Repeats story published late on Wednesday)
By Roman Gazdik
PRAGUE, Dec 8 (Reuters) - Any budget exemptions the European
Union may grant to member states to account for deficit-swelling
pension reforms will probably be assessed on a case-by-case
basis, a deputy Czech Finance Minister said on Wednesday.
The Czechs and eight other EU states are trying to wrest
concessions from the European Commission to allow them to deduct
the costs of switching from solely pay-as-you-go to partly
private pension systems to help them meet the bloc's strict
budget rules.
After talks on Tuesday among EU finance ministers, Czech
deputy Finance Minister Tomas Zidek said the solution would be
so general that it could be applied differently for each state.
"It would be of course valid for all the states, but in the
end would mean an individual approach," Zidek told Reuters,
adding that a deal was still far away.
The EU is split on whether to let countries reforming their
pension systems shave percentage points off their annual budget
deficit numbers to reflect the fact that switching to partially
private systems cuts the long-term obligations that fully
state-run systems demand.
Amid concerns over the debt of euro zone periphery states,
some economists fear such a move could lead countries to avoid
budget consolidation, and some such as Poland and Hungary have
announced plans to roll back reforms to boost state revenues.
[]
The Commission proposal under debate stipulates that
countries breaching the bloc's 3 percent of gross domestic
product deficit ceiling due to pension reform would have their
finances checked by Brussels and referred to further debate
among EU ministers before receiving a potential exemption.
In September the European Commission proposed that countries
implementing pension reform be treated leniently for a period of
five years after the start of that reform. []
Zidek said Poland wanted that to be extended for at least 40
years and the resources transferred from the state pillar to the
private pension funds be counted as quasi-state revenues.
"The Commission said this (extension) is an unacceptable
pulverization of the pact, and we think they are right about
this," he said.
On Tuesday, Polish Prime Minister Donald Tusk said Warsaw
and Brussels were near a provisional deal, although his finance
minister proposed postponing talks until March. []
Warsaw, backed by Hungary, was largely dominating the
discussion, Zidek said.
"It was basically a dialogue between the Polish finance
minister and the commissioner," Zidek said. "The Hungarians are
sticking close to (the Poles) but no one else really is."
Set to launch pension reform in 2013, Prague wants to use
one-off earnings from state dividends and privatisations without
having to count them as spending, as EU rules now dictate.
"We support the current proposal of the Commission," Zidek
said. "We would be... satisfied with any solution, since we are
preparing our reform and we can fit it into whatever will
be agreed."
Hungary, which is fighting to bring its budget shortfall
under the 3 percent of GDP ceiling, has overturned a 1997
pension reform by effectively forcing workers to revert from
private pension accounts back to the state pay-as-you-go system.
Poland, which has a budget deficit seen topping 7 percent of
GDP this year, has rejected such a radical scenario and will
trim pension transfers to private funds from 7.3 percent now,
possibly to 5 percent. []
