Romania court delays ruling on pension reform law-UPDATE 1

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Wednesday September 29, 2010 09:52:11 AM GMT

* Judges need more time to assess EU legislation on pensions

*Rejection could undermine IMF bailout, weaken currency

(Adds more details on case, Romanian politics, IMF, comment)

By Radu Marinas

BUCHAREST, Sept 29 (Reuters) - Romania's top court has delayed ruling until next week on reforms required under a 20 billion euro ($27 billion) IMF-led bailout to overhaul the country's bloated communist-era pension system.

The nine-judge Constitutional Court had been expected to announce its verdict on Wednesday. But judge Valentin-Zoltan Puskas, who sits on the court, told Reuters it has decided to meet again on Oct. 6 to debate and issue the ruling.

"Judges would need more time to individually study the international legislation on pensions," Puskas told Reuters.

Pension reform legislation is a key requirement of the 2009 deal led by the International Monetary Fund which rescued the Romanian economy during the global financial crisis.

A rejection, seen as the more likely outcome, would damage the fragile coalition government of Prime Minister Emil Boc, who is battling popular discontent to make austerity measures stick with a wafer-thin parliamentary majority.

The court has the power to overturn any reform bills it deems unconstitutional. Nearly half its members were proposed for their posts by the current opposition.

"We need more time to assess European laws to see what are their practices before coming up with a decision," a second judge on the court, Acsinte Gaspar, told Reuters.

The court threw out a separate proposal to cut pensions by 15 percent in June, which forced the government to enforce an unpopular hike in value added tax to 24 percent -- one of the highest levels in Europe.

Boc's centrist coalition government pushed the current bill, overhauling the unsustainable pay-as-you-go system in the European Union's second poorest economy, through parliament.

But the leftist opposition Social Democrats have challenged the bill, seeking to keep special pensions for policemen, army, magistrates and secret services in place.

The bill would also scrap what some media call "luxury pensions" and tie any pension hikes to inflation rather than wages. It also aims to raise the retirement age to 65. (Additional reporting by Sam Cage; Editing by Ruth Pitchford)

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