Pension privatization in Romania: The context of central and eastern european reforms. Internal and external influences - Claudiu Barbu

The idea to reform the pension systems in Europe came much later, but Arza and Kohli (2008) argue that the preference for the term “pension reform”, to the detriment of more neutral notions such as “change” or “transformation” is not coincidental. Whatever the case may be, the process involves reducing some of the funds allocated to social protection so that pension schemes could be financially sustainable. Still, according to Vivien Schmidt, “any unpopular measure within the welfare state will not be successful if it fails to convince the population that it is also morally necessary” (Schmidt, 2000). In addition, the term “reform” is more easily accepted among citizens than the notions of “change” or “transformation”, so implicitly the “reform” measures are more easily accepted. In general, the reform of the pension system in Europe, meant, in addition to certain parametric changes and pension privatization, that the fiscal pressure on the insurance budgets of the states already in a global economic competition would diminish. However, the transfer of pension funds from the state administration to a private one is not a European invention. Chile implemented such a system already in the 1980’s and those kinds of changes were later adopted by many of the South American countries (Weyland, 2005).