Bloomberg News

Bulgaria Changes Plans to Raise Retirement Age After Protests

December 01, 2011

Dec. 1 (Bloomberg) -- Bulgaria backed off from a plan to raise the retirement age by a year in 2012 after thousands of people marched and rallied yesterday, blocking traffic in the capital Sofia.

Lawmakers of the ruling Gerb party and government officials told trade unions they would instead increase the age in four- month increments each year starting in 2012, until it reaches 65 for men and 63 for women, from 63 and 60, respectively, Menda Stoyanova, the head of Parliament’s budget committee said in an interview with BTV television in Sofia today.

The trade unions will discuss the proposal later today before a final agreement is reached, Konstantin Trenchev, leader of the Podkrepa syndicate, the second-biggest union in Bulgaria, told reporters. The government also abandoned plans to increase the retirement age for miners, police and army, Stoyanova said.

Bulgaria, the European Union’s poorest country in terms of economic output per capita, weathered the global crisis without borrowing from international lenders. The country aims to narrow next year’s budget gap to 1.35 percent of gross domestic product in 2012, from 2 percent this year, in an effort to contain the impact from the euro area’s sovereign debt crisis.

Planned spending cuts triggered protests in the past four days by farmers who have blocked major highways for several hours each day. A railways workers’ strike went into its eighth day, idling dozens of trains each day between 8 a.m. and 4 p.m. after the Bulgarian State Railways EAD said it will dismiss 2,500 workers and cancel 150 train lines by the end of the year.

The International Monetary Fund begins an eight-day visit to Bulgaria today as part of a regular review of the government’s economic policies. The IMF urged the government last year to make sweeping changes in its public pension system to narrow a 2 billion-lev ($1.37 billion) deficit in the state pension fund.

The EU cut Bulgaria’s 2012 economic growth forecast to 2.3 percent from 3.6 percent, while the government calculated next year’s budget on a 1 percent growth assumption to compensate for declining exports to the EU. Parliament will complete voting on next year’s budget in a second, final reading by the end of the month.

--Editors: James M. Gomez, Alan Crosby

To contact the reporter on this story: Elizabeth Konstantinova in Sofia at ekonstantino@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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