Dec. 7 (Bloomberg) -- Lithuania’s ruling coalition rejected a plan by the opposition to raise retirement benefits to pre-crisis levels.
Lawmakers voted 63-34, with 37 abstentions, to block the motion, according to a TV broadcast from parliament in Vilnius. The plan risked increasing budget spending by 600 million litai ($232 million) next year.
Prime Minister Andrius Kubilius’ ruling coalition, which holds a one-vote majority, fell short of blocking the plan to raise pensions during a first reading last week. Kubilius had warned that the country couldn’t afford higher pensions and that increasing them would threaten financial stability.
The government introduced two-year cuts to social benefits and pensions at the end of last year, helping reduce spending by about 5 percent of gross domestic product. Pensions were lowered by an average of 5 percent from January, while the lowest retirement incomes remained unchanged.
Finance Minister Ingrida Simonyte said on a Nov. 26 TV show that she would resign if the amendments were approved in the final vote.
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