The Pension Reform allows both sides to claim victory, mining reactivation is the next step in the reform sequence, and the Supreme Court opens the door to resolving Ricardo Martinelli’s case
The approval of the reform to the pension law can be considered a victory for all the opposing groups, except for the leftist unions and educators: the retirement age was not increased, the additional employer contribution was staggered, but the individual notional account system was maintained, even though the funds from both subsystems will be merged. The government will have to make significant annual contributions, a responsibility that previous administrations failed to meet. However, Mulino has now more room to advance further reforms.
Although from an accounting perspective government transfers to increase Social Security Fund (CSS) reserves may not result in SPNF deficits, the government must secure financing sources equivalent to 1% of GDP. This requires a thorough review of the fiscal accounts.
The next step in the reform sequence is the reactivation of mining operations, for which constitutional obstacles are yet to be resolved. In other judicial news, the Supreme Court provided some relief to Ricardo Martinelli by agreeing to review the New Business case, in which he was convicted thirteen months ago. However, there are divergent opinions on his prospects.
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