ITALY - The Italian government said it will not propose penalties for workers opting for early retirement, writes the Financial Times.
The proposal is part of Italy's centre-right government’s effort to take a cautious approach to pensions reform.
Last week the four ruling coalition's parties reached a preliminary deal on changes to the heavily indebted state pensions system.
The proposals form part of Italy’s latest four-year economic plan.
The FT suggested that the government was treading carefully and avoiding measures that would either strain the coalition or provoke an angry public reaction.
Under the agreement, so-called seniority pensions would be left unchanged until 2008. However, a system of incentives would be introduced to encourage people to stay in their jobs.
That step, coupled with the gradual impact of changes introduced by previous Italian governments in the 1990s, could be sufficient to raise the average retirement age to 60 by 2008, said the FT.
But some economists said that without far-reaching changes it was unclear how the government proposed to make a dent in the 14% of GDP that currently goes on pensions expenditure.
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