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Italy raises public-sector pension age for women

June 10, 2010

by Guy Dinmore and Giulia Segreti, published June 10 2010

Italy’s cabinet on Thursday bowed to pressure from the European Commission by agreeing to increase the retirement age for women in the public sector, adding a modest but still important structural element to the centre-right government’s controversial deficit-cutting package.

The retirement age for women will be raised by four years to 65 from 2012, bringing them in line with men, Maurizio Sacconi, welfare minister, told reporters.

Financial savings to the state are relatively slim, estimated at 1.45bn euros by 2019, since in effect the average retirement age for women in the public sector was already just over 62 years, based on a calculation of age and years in service. Under the new law some women will still be able to retire a year or so earlier than 65 if they have worked for a certain period.

The change is to be included in the government’s 25bn euro deficit-cutting package announced last month by Giulio Tremonti, finance minister, and currently being debated in parliament.

Although the package was initially commended by the EU and the IMF, serious doubts over its efficacy have been raised in Italy. Silvio Berlusconi, prime minister, is under pressure from even allies in parliament to water down proposed cuts in services, particularly education, and funding for regional governments which will severely hit the health care sector.

The two-year package – intended to bring the budget deficit down from over 5 per cent to below 3 per cent by end-2012 – was also criticised by economists for lacking long-term structural changes, such as pension reform.

Renato Brunetta, minister for civil service reforms, said Italy’s average retirement age in the private sector was about 61. Italy has one of the lowest overall retirement ages within the EU.

The changes follow a statement on Monday by Viviane Reding, European Justice Minister, who rejected Italy’s plans for a more gradual implementation of the higher pension age for public sector women.

Mr Sacconi noted that the Italian government could have come in line with the European Court of Justice ruling by lowering the age of retirement for men to bring them in line with women but suggested that the markets would have reacted badly.

The opposition Democratic party was broadly in favour of raising the pension age for women but criticised the government for failing to tackle discrimination against women in the labour market. Only some 47 per cent of Italian women have jobs, the lowest level in Europe.

“In our country the welfare system is not adequate to allow women to combine their family life with their professional one”, said Sandro Gozi, an opposition member of parliament.

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