More Pressure for Pensions Reform - EU

The European Commission has brought more pressure on the government to carry through pensions reform amid an ongoing dialogue on the isssue between the finance ministry and civil servant unions.

The Commission's 2011 report on the island's Stability Programme recommends that the government extend the retirement age and reform pensions. Other measures it recommends are to accelerate the national health system, curb excessive deficit by 2012, strengthen banking and co-op bank supervision, and to link wage bargaining to productivity and competitiveness.

Pension reform has been on the House of Representative's agenda, but the debate was frozen during parliamentary elections. For the moment, the government is focusing on cutting out multiple pensions for civil servants, but there have been calls for wider reforms.

Vice-president of opposition party DISY Averoff Neophytou said that it is clear that Brussels is not satisfied with the measures the government has taken to get the economy back on course. It is now time to set a deadline to solve the issue of pensions reform, he said.

Other recommendations

Cyprus also needs to improve vocational education by setting up a training institute and put together a water management plan, said the Commission.

In other EU-related developments, the European Parliament has introduced a "polluter pays" rule in road transport, which is a fee allowing member states to impose road tolls on trucks over 3.5 tonnes. The money from fees will be used for road transport projects, said the EP. Trucks with fewer emissions (equivalent to EuroV) will be exempt from the fees until January 1st, and those with emissions at Euro VI levels will be exempt until January 1st, 2018.

The new rules still have to be formally adopted by all member states, and were passed by the EP by 505 in favour and 141 against, with 17 abstentions.