Lacalle Pou warns union reforms threaten pension system sustainability

President Lacalle Pou warns of the risks posed by the union's proposed pension reforms. He claims the changes could render the system unsustainable, harm the national economy, and negatively impact future generations and foreign investments, urging citizens to reject the proposal.

The press conference highlighted the potential economic and social impacts of the proposed pension system reforms.

Luis Lacalle Pou argues that union-led pension reforms could lead to negative outcomes, including potential new taxes and reduced foreign investments.

union reforms, pension system, Lacalle Pou, social security, referendum, investments

Uruguayan President Luis Lacalle Pou addressed the ongoing referendum organized by PIT-CNT, the country's main labor union, during a press conference. The union aims to overhaul the current social security system through reforms that include lowering the retirement age, increasing minimum pension amounts, and eliminating mandatory individual savings managed by the AFAPs. Lacalle Pou expressed concern that adopting this initiative could make the pension system "unsustainable."

The president highlighted that the pension reform enacted during his administration was the outcome of an "extensive social dialogue" and was implemented through the Law of Urgent Consideration. He described this reform as establishing a fair and sustainable system. The reform introduced "minimum protection schemes" and aligned the different pension subsystems, including the semi-state pension funds. Additionally, he pointed out that the reform created the "possibility of retiring while continuing to work," which he considers a significant advancement.

Lacalle Pou painted a concerning picture of the referendum, warning, "The proposed changes lead down a very dangerous and harmful path." He emphasized that if the system was unsustainable before the reform, approving these changes would exponentially increase the likelihood of continued instability. If the "Yes" vote prevails on October 27, he cautioned, the government would be forced to "introduce new taxes or cut sensitive benefits."

The president also focused on the "younger generations," who, according to surveys, seem to have limited awareness of the proposed changes. "They are the most affected," he stated, highlighting the potential impact on their future pensions. He further warned that the referendum's approval could result in "reduced foreign investment" and discourage job-creating investments. "This is not about fear-mongering; this is the reality," he emphasized, noting that Uruguay currently enjoys the lowest country risk in its history, and this situation could be a "direct blow to the heart of confidence."

In his closing remarks, Lacalle Pou urged citizens to reject the proposed reform. "Now is not the time for hesitation or half-measures. If we know it's not beneficial and will harm future generations, we must take a stand; there is no other option," he concluded, underlining the urgency of his message.