Italy Seeks to Raises Retirement Age

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Italy Seeks to Raises Retirement Age

August 25, 2003

Premier Silvio Berlusconi's proposal to reform Italy's pension system by raising the retirement age by five years was received with caution Monday by his conservative allies.

With Italy's aging population and declining birthrate, reform of Italy's pension system has been a key, albeit thorny, issue for governments in the last decade.

The premier said in an interview published Sunday that Italy "needs to raise the retirement age by five years."

"In Italy people retire at an average of 57," he told the newspaper Libero. "How can one stop working at such a young age?"

Under current legislation, workers with 35 years on the job can retire if they are at least 57.

Berlusconi has insisted the reform is necessary because Italy's aging population is putting an unsustainable strain on state coffers. International organizations such as the International Monetary Fund (news - web sites) or the European Union (news - web sites) have also pressured Italy to rein in its deficit.

"We start off every year with a 70 trillion lire ($39 billion) pension deficit," Berlusconi said.

However, he added, he wanted to secure the backing of his two key allies, National Alliance and the Northern League.

"I will convince them," he told Libero. "On Sept. 1, I will lay down some very strict conditions."

Both allies reacted cautiously Monday.

Labor Minister Roberto Maroni, a top League official, said he agreed with the premier's proposal on principle, but added the reform should introduce "incentives" to keep working five years longer. He ruled out any reform forcing workers to stay.

National Alliance's Ignazio La Russa warned the matter would not be solved in the first two weeks of September. He also noted that unions, which have already announced their opposition to the plan, would have to be dealt with.

"If they upset our pension system, we'll fight against it," said Savino Pezzotta, leader of the CISL union.