- Title: HUNGARY-PENSIONS Hungarian protesters march against planned pension changes
- Date: 26th November 2014
- Summary: (SOUNDBITE) (Hungarian) PROTESTER JOZSEF Z. KOVACS SAYING: "This is theft, this is robbery of a large group, this is a crime punishable by international law. The savings of 60,000 people cannot be just taken, cannot be stolen." BANNER SAYING 'LETS CLEAR OUT ORBAN' BUDAPEST, HUNGARY (NOVEMBER 26, 2014) (REUTERS) (SOUNDBITE) (English) GOVERNMENT SPOKESMAN ZOLTAN KOVACS SAYING: "Nobody is taking away the pension, there has been rumours and gossip around, nobody is incorporating the 200 billion. This is the system that is going to work after parliament votes about it, I don't know when it's going to happen, most probably in December, practically the new regulation system will start in January. I think it's a common interest that payments and the kind of assets and revenues of these financial institutions are secure. The budget don't count on this 200 billion, it's obviously, completely clear from the numbers of the budget if you take a look." BUDAPEST, HUNGARY (NOVEMBER 25, 2014) (REUTERS) MOCK BANNER SAYING 'NATIONAL DEMOCRACY: EMPTY' PEOPLE HOLDING BANNERS BANNER SHOWING DICTATORSHIP SPRINGING OUT OF BOX OF ILLIBERAL DEMOCRACY BANNER SAYING '2/3: STILL OUT OF CONTROL' BUDAPEST, HUNGARY (NOVEMBER 26, 2014) (REUTERS) (SOUNDBITE) (English) ANALYST OF POLITICAL CAPITAL PETER KREKO SAYING: "This is a hypocritical argument that the government says they want to defend the people from not having pensions in the future but what they really do is that they nationalise their private assets and what is even more problematic is that the government nationalised practically ten billion Euros in private pension funds in the beginning of the previous governmental period and they practically they just spent it away almost all of it on everyday expenditures so this is nothing else than just spending the future pension money." BUDAPEST, HUNGARY (NOVEMBER 25, 2014) (REUTERS) BANNER READING: 'THEFT IS STILL A THEFT EVEN IF A LAW IS CREATED FOR IT' PEOPLE HOLDING BANNERS ELDERLY MAN HOLDING BANNER SAYING 'GO TO AZERBAIJAN / TODAY OUR PENSION FUND, TOMORROW OUR PENSION' POLICE CAR NEAR PARLIAMENT PROTEST
- Embargoed: 11th December 2014 12:00
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- Reuters ID: LVAB72QY9YKE1W78AM4LJD9HN6X7
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- Story Text: More than 3,000 protesters marched on the Hungarian parliament on Tuesday night (Nov. 25) to demonstrate against a planned change in the rules on pension funds.
Prime Minister Viktor Orban's government denies it is taking anyone's pension, but the proposed change is one of a flurry of financial measures from his government that have led critics to accuse him of trampling on property rights and economic freedoms to fill up the budget coffers.
The pension change does not directly target any particular group, but -- like many of the government's measures - it triggers a chain of events which wind up earning the state money at someone else's expense, critics say.
Before Orban came to power, Hungary had a hybrid pension system, with some funds kept in the state system, while a part of the saver's pension pot was kept in private funds. Employers and workers made mandatory contributions to both.
Soon after he was elected in 2010, Orban's government ended mandatory payments into the private funds and nationalised the money they contained. That effectively allowed the government to take 12 billion USD in private pension assets.
Economists and investors were alarmed, but the government softened the impact. It said those savers who wanted to could stay in the private funds, though the mandatory contributions would still stop for them.
About 60,000 people chose to stay in the funds. The change the government has now submitted to parliament is that the funds will be closed down, and their assets absorbed into the state pension system, unless at least 70 percent of savers are making monthly payments into the private funds.
At the moment, around 10 percent are making the payments, meaning that under the planned measure the private funds would have to close down, according to Horizont, the biggest of the private funds in Hungary.
Tamas Merei, a 39-year-old software developer in Hungary, believes the government of Prime Minister Orban is going to take away the 25,000 USD he has in his pension pot.
"I have 6 million Forints [approx. 25,000 USD] saved in private pension fund savings and this is what they want to take from me. I disagree with this, there was a system that worked well I think, it was destroyed. This is my private wealth, this is stealing, this is theft," he said as he marched.
The organiser of the protest, Zoltan Vajda, a businessman with three young daughters, has 3.5 million Forints (14,230 USD) in the private pension funds.
"These are my last savings," he said in front of parliament on Tuesday night. "The representatives are about to adopt a law that will likely cause our last investments to vanish," he told the protest.
"I would like to handle my own private savings, this counts as private wealth, these were private accounts," protester Zita Kalman, a teacher said.
Asked about accusations that the state is stealing savers' pension pots, Economy Minister Mihaly Varga said on Monday:
"That is not true, that is foolish. We are not taking away any kind of money. If the members paid membership fees then the funds could continue operating."
Government spokesman Zoltan Kovacs said on Wednesday that the funds were not legally private but added that the government is not out there to get its hands on the funds.
"Nobody is taking away the pension, there has been rumours and gossip around, nobody is incorporating the 200 billion. This is the system that is going to work after parliament votes about it, I don't know when it's going to happen, most probably in December, practically the new regulation system will start in January. I think it's a common interest that payments and the kind of assets and revenues of these financial institutions are secure. The budget doesn't count on this 200 billion, it's obviously, completely clear from the numbers of the budget if you take a look."
But according to analysts that is the kind of argument the government often uses to mask its money-raising schemes.
"This is a hypocritical argument that the government says they want to defend the people from not having pensions in the future but what they really do is that they nationalize their private assets and what is even more problematic is that the government nationalized practically ten billion Euros in private pension funds in the beginning of the previous governmental period and they practically they just spent it away almost all of it on everyday expenditures so this is nothing else than just spending the future pension money," analyst of Political Capital Peter Kreko said.
Diplomats says the rush of revenue-raising measures is because Orban wants to raise wages for some public employees and build new infra-structure. European Union rules prevent him from borrowing that cash, so he has to find it elsewhere.
The numbers affected by the pension change are too small to mount a big protest movement. In any case, Orban's grip on power is firmly entrenched. He was re-elected in April in a landslide, and the left-wing opposition is in chaos. - Copyright Holder: REUTERS
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