ITALY: Unions Agree to Government Pension Plan

ROME (The Peninsula, Qatar), July 21, 2007: Italian Prime Minister Romano Prodi’s fractious coalition yesterday accepted a pension reform package that will gradually raise the retirement age to 60 by 2011. The new plan would raise the retirement age to 58 in 2008 and then to 59 in 2009 and finally to 60 in 2011. Those who retire at 58 next year will have to have paid into the system for 35 years, and 60-year-olds in 2011 will have to have paid in for 36 years. The changes will affect low-income pensioners as well as precarious workers. The reform is expected to cost an additional 10 billion euros over the next 10 years. Economy Minister Tommaso Padoa-Schioppa said the reform would pay for itself, adding that he expected a green light from the European Union as the cost would be offset by savings in the overall retirement administration. Italy has Europe’s greyest population, counting 141 people over age 65 for every 100 who are under 18, according to the 2006 report of the Italian National Statistics Institute (ISTAT). Worldwide, only Japan has a greyer citizenry. Some 16.5 million Italians in a population of 59 million are retired, of whom one in four cash monthly pension checks of less than 500 euros. The pension reform follows months of negotiations and will still leave Italy with one of the lowest legal retirement ages in the European Union. (Source: Global Action on Ageing)