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Czech house backs pension reform in first vote

The lower house of the Czech parliament approved the government’s key pension reform bill on Wednesday in the first out of three readings, endorsing the plan to raise the retirement age.

The center-right cabinet aims to raise the pension age to 65 years by 2030 from 63 and set the ground for a further reform, that would give people larger control over their future pensions by promoting savings. “Raising the retirement age is surely an unpopular thing from the short-term perspective,” Labor and Social Affairs Minister Petr Necas told the lower house. “However it is undoubtedly a change to the benefit of citizens, current and future pensioners, because raising the retirement age will contribute most to the stabilization of the pension system.” The bill will now go into committees for thorough discussion and the lower house is expected to take a final vote in about two months.

Prime Minister Mirek Topolanek has staked his future on the reform, which follows personal and corporate tax cuts, a sales tax hike and restrictive steps in the central European country’s welfare and the health systems. The reforms have won endorsement from financial market analysts and the Fitch rating agency, which raised its assessment of the country’s credit worthiness by one notch to ‘A+’ earlier this month. But the changes have also raised tension in the ruling coalition and angered the leftist opposition and labor unions. (Reuters)