Coalition parties approve pension reform and state expenditure cuts

Representatives of the three Czech ruling coalition parties have agreed to measures aimed at reducing the country's growing deficit of public finances. Cabinet experts agreed to reduce the number of state bureaucrats and to slow down wage growth in the public sector. The ministers also approved a radical reform of the pension scheme from a continuously financed system to a savings-based one. The retirement age will be increased to 63 from the current 61 for men and 60 for women. Czech economic experts and foreign institutions have repeatedly warned that the growing public finance gap is unsustainable and besides causing other problems, it could pose a threat to the country's adoption of the single European currency.