Prime Minister Lawrence Gonzi said in parliament this evening that it was important that the country continued to review its pensions system to ensure that pensions were adequate and sustainable well into the future.

Replying to questions by the leader of the opposition about whether Malta had told the EU that it would further reform the system, Dr Gonzi said the problems in Greece and other countries stemmed from the fact that they had not carried out reforms which would have been unpopular, but which they now had to carry them out under pressure.

In Malta, reforms had been carried out to ensure that pensions were adequate and sustainable, a process which would continue. The Opposition, he said, should not seek being popular in a way which was irresponsible.

The law approved by Parliament five years ago provided for a review of the pensions system every five years.

The main issue, he said, was about having adequate pensions. Current pensions were capped and the highest pension was about €10,000. This maximum needed to be raised gradually.

Important changes had already been made. Pensioners could now work and earn as much as they wished, without losing their two-thirds pension. The retirement age was also being raised, in phases to 65.

What was wrong in considering where to go from here, Dr Gonzi said.

COLA REFORM

On the Cost of Living Mechanism, Dr Gonzi said this mechanism had served Malta well and averted industrial strife. In the EU, he said, there were countries which had other automatic wage indexation as a percentage of the cost of living. In Malta, the same cost of living increase was given to all workers, independently of their salary.

It appeared, he said, that the EU had understood the Maltese mechanism after initially calling for its removal.

What the EU was now requesting as an evaluation of the current system and how it affected competitiveness and productivity, a process which was already in train with the MCESD.