(By Sandra Cordon).
Italy's Constitutional Court said
Thursday that its ruling overturning a freeze on some higher
State pensions effectively replaces the rejected regulations.
And the government can now take whatever actions it chooses
to deal with the fallout, the court added in a statement that
came one week after the decision which has sent shock waves
through Premier Matteo Renzi's cabinet.
Initial costs could be up to five billion euros - the
amount saved under the 2011 measures - and some estimates say
that could rise to almost 17 billion euros.
The government has said it is reviewing options and some
published reports suggested that could mean a plan with
repayment of outstanding pension money by installments.
The Constitutional Court, which published its decision
Thursday, said in a statement that publication meant the ruling
had now taken effect.
The court added that political bodies can take "measures
for the case within Constitutional conventions... where they
deem necessary".
Last week, the court struck down the 2011 regulations by
the emergency technocrat government of ex-premier Mario Monti
suspending some inflation indexing on some State pensions to
save billions of euros.
The measures affected only pensions greater than three
times the minimum pension provided by national agency INPS.
That plan came during a very low point in the Italian
economy, which was plagued by recession and very high interest
rates on the huge national debt and at the time risked a
Greek-style financial meltdown.
Economy Minister Pier Carlo Padoan said Wednesday that the
government is now trying to balance its budget demands with the
court ruling.
"We are thinking hard...of measures that minimize the
impact on public finances, in full respect of the court," he
said.
Government sources said that the ruling does not
necessarily mean all of that money has to be repaid.
Economy Ministry Undersecretary Enrico Zanetti, secretary
of the small Civic Choice political party that was founded by
Monti, said it would be "immoral" to repay all the money.
The ruling on pension payments could cost Italy more than
16.6 billion euros in total, the CGIA small business association
of Mestre has said.
The European Commission is also watching closely, sources
say, to ensure that any government measures in response to the
ruling don't push the Italian budget outside EC rules on debt
and deficits.
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