04 June 2003

Search all issues

powered by FreeFind

Send Your Feedback!

Massive strikes continue to characterise pension reform

- strikes not impacting Air Malta directly

By Kurt Sansone
Pension reform has hit choppy waters in France and Austria with widespread industrial action yesterday paralysing public transport and air travel causing massive disruption to commuters and airline passengers.
Meanwhile, a spokesman for Air Malta said that the strikes had no immediate impact on the airline’s flights. If the strikes persist there could be an increased demand for seats on Air Malta flights that operate on routes hit by the strikes.
Industrial action by Alitalia employees yesterday had no connection to the French and Austrian strikes. The Italians were protesting over a decision to reduce the number of cabin crew staff.
The French and Austrian governments in both countries are pushing for reforms that will force employees to work longer for their pension.
Under reforms approved by the French cabinet last week, public sector employees will be obliged to work for 40 years to qualify for a full pension, up from 37.5 years at present.
Despite having reached agreement with the second largest trade union, the French government is facing the wrath of employees because Prime Minister Jean-Pierre Raffarin wants the reforms approved by parliament before the summer recess.
The Austrian government wants to oblige employees to work for 45 years instead of the current 40 years to qualify for a full pension.
Both countries are trying to stave off unsustainable pension systems. Falling birth rates are contributing to a declining workforce that in turn has to support an ever-increasing ageing population.
Pensions reform is a Europe-wide issue and although pensions do not fall within the remit of the European Union competencies, the Commission has urged member states to undertake reforms.
The French and Austrian reforms aim to encourage employees to retire at a later age thus increasing the effective retiring age. Although the retiring age in most EU countries is 65 years most Europeans retire well before. One of the recommendations made in the joint report issued by the EU Commission and the Council is to increase the effective retiring age by three years.
Apart from being a public finance issue, pensions reform is also considered to be essential for sustained economic growth throughout the European Union.

Pensions reform in Malta

Malta is not immune to the demographic pressures that are instigating the need to reform pensions throughout the European continent.
However, government has no national strategy for reform yet despite a general consensus that something must be done.
The strong words mouthed by Finance Minister John Dalli in an interview with The Times soon after the 12 April election about the urgent reforms required in the pensions system have not yet resulted in concrete action.
The National Welfare Commission has to date not produced any results prompting Minister Dalli to exclaim that the country has wasted five years.
In an interview with our sister publication MaltaToday, on 25 May, Social Policy Minister Lawrence Gonzi said that "within a matter of weeks" the NWC had to meet to "push the process forward."
Gonzi also said that he expected a blue print for reform "within a few months."

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
The Business Times, Newsworks Ltd, 2 Cali House, Vjal ir-Rihan, San Gwann SGN 02, Malta
Tel: (356) 21382741-3, 21382745-6 | Fax: (356) 21385075 | E-mail