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No ruling by the Constitutional Court on pension funds

December 30th, 2011

Népszabadság accuses the Constitutional Court of cowardice for failing to rule, at its final session of the year, on complaints over the de facto nationalisation of the compulsory private pension funds.

The Court did not want to comment on its decision not to take a position on an issue which has been debated since August last year, when the newly elected centre-right government redirected fresh pension contributions from the private funds to the public pension system. The government had originally asked the European Union to be able to detract those savings from the sum of the public deficit – but in vain. Its decision then cut the deficit by well over 1 per cent of GDP. The government later abolished the obligation to pay 25 per cent of the pension contributions to the private funds and invited citizens to opt for the public system. Most of them did so. At the same time a bill was passed, according to which the Constitutional Court was stripped of its previous competence in matters concerning taxes and levies, including the pension contributions. It would therefore not have been easy for the judges to express a ruling. According to the new Constitution, from January the 1st, the rules will change, and complaints can be lodged with the Constitutional Court by a restricted number of institutions only, therefore most earlier complaints will automatically be archived. But according to a provision regulating the transition, earlier plaintiffs can turn to the Constitutional Court once more, until the end of March.

Writing in Népszabadság, Zoltán F. Baka believes that any renewed complaints will have no chance of success, for the Court will be able to point to its „narrow elbow-room”. Baka says he would have accepted any kind of decision by the Constitutional Court, but was deeply disappointed by the failure of the judges to issue a ruling on Wednesday.

He suspects that the court is influenced by the governing political forces. „The guardians of the Constitution should be keen to maintain a clear distance from political influence. But we have witnessed the erosion of this distance, month by month,” – Baka contends. He concludes that the Constitutional Court has lost its prestige and “has become one of the numerous money squandering institutions.”

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