BUCHAREST (Reuters) -Romania’s top court on Wednesday postponed ruling on challenges brought against measures to lower the largest budget deficit in the European Union, prolonging uncertainty over the stability of the broad coalition government.
The tax hikes and state spending cuts, which the government fast-tracked through parliament, are part of wider efforts to take the fiscal shortfall to 6% of economic output next year from over 9% in 2024.
The measures were broken down into five bills, with an overall budget impact of roughly 10.6 billion lei (2.09 billion euros). They would raise the retirement age for judges and prosecutors, cut jobs and limit remuneration for state firms and financial, telecoms and energy regulators, and introduce tax hikes from 2026.
The Constitutional Court upheld the bill concerning state regulators, but postponed a decision on the remaining four bills until October 8.
Liberal Prime Minister Ilie Bolojan said this month “it is hard to assume this government will retain legitimacy to solve other injustices” should the court reject the measures.
The broad coalition of four pro-European parties took power at the end of June, but the parties have repeatedly clashed over the deficit and have yet to agree on planned public administration job cuts.
Among measures the Court has postponed ruling on until Oct. 8, the most divisive are changes to judicial pensions.
Judges and prosecutors retire on average at 48-49 with an average pension of up to 5,000 euros monthly. In contrast, the average Romanian pension stands at 600 euros per month.
The government wants to raise the retirement age of the judiciary to the standard 65 over a transitional 10-year period, and cap pensions to 70% of their final salary. The top court has struck down previous attempts to change judicial pensions.
The measures alongside tax hikes approved earlier this year were enough for ratings agencies to maintain Romania on the last rung of investment grade for now.
They came at a steep cost, triggering public sector protests, fuelling inflation and bolstering the opposition far right in opinion surveys.
(1 euro = 5.0768 lei)
(Reporting by Luiza Ilie, editing by Ed Osmond)
