Romania's Constitutional Court on November 25 cleared a budget draft law that provisions for a gradual increase of the social security benefits.

The index used to calculate the benefits will rise by 140% over the next three years, G4media.ro reported.

The impact on the budget expenditures will reach RON 10 billion (EUR 2 bln), or some 1% of GDP per year, at the end.

The impact in the first year of application (2021) is estimated at 0.4% of GDP.

The Government referred the law to the Constitutional Court, arguing that the draft law does not single out the source of financing for the higher benefits.

In a separate ruling on November 25, the Constitutional Court rejected a draft law provisioning a 15% bonus for the public servants and contract staff in the Presidential Administration, the Government's General Secretariat, and the Parliament services.

The Constitutional Court explained that the draft was passed in a significantly different form by the Senate before the Chamber of Deputies gave its final vote on it.

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andrei@romania-insider.com