A red circle on a wall calendar in a
Soviet-era apartment in the Latvian capital marks the day when Inna Arakceeva
gets paid.
For her, it is not a happy day.
After working for 37 years, Arakceeva, 75, receives a government pension of 140
lats (294 dollars) a month and it never catches up with rising prices in this
Baltic nation, where Latvians will vote Saturday on whether to overhaul their
pension system.
Latvia boasts the European Union's highest inflation rate - 16.7 per cent on
the year in July. Prices for basic goods, like milk and bread, have risen
beyond the prices in some western European countries.
People like Arakceeva who depend on their pensions feel the pinch when they go
shopping.
"The prices rise every month," she tells Deutsche Presse-Agentur dpa.
"You go, get some basic foods and your pension has evaporated. Often I
just can't make ends meet."
Prime Minister Ivars Godmanis's centre-right government raised pensions twice
this year, but it didn't make pensioners happy.
"It's just enough for another trip to a store," Arakceeva says.
Saturday's referendum is on a measure that would tie pensions to the
government-set subsistence level. Currently, that would nearly triple the
minimum monthly benefit from about 50 lats (120 dollars) to at least 135 lats.
Backing the proposal is the newly launched Society for Different Politics
(SCP), which plans to become a political party and hopes that squeezed retirees
like Arakceeva will turn out to vote.
The government says the measure would bring the pension system to a halt.
"The government has raised the income of older people as much as possible
without threatening the stability of the pension system and the budget,"
Godmanis told a Latvian newspaper recently.
"It's not only the question of wishes, but of abilities."
With the economy on the edge of recession, the government has frozen hiring and
seen its tax intake dwindle. The current budget projects a surplus of just 0.05
per cent of gross domestic product.
However, supporters say that tax revenue should be enough to allow for a
pension hike.
"The state revenue is sufficient to secure such a pension increase.
Furthermore it's the state's responsibility to take care of the least protected
residents," SCP leader Aigars Stokenbergs said.
Voter turnout will be crucial. For the measure to become law, 453,760 votes of
the 1.5-million-strong electorate have to be cast. Some Latvians are not
planning to vote because they believe it's the government's decision how the
money should be spent.
Others see the referendum as a populist measure tailored to give a boost to the
SCP, which is slated to field candidates for 2009 local elections and general
elections the following year.
A Latvian internet betting agency, Tribet, is laying odds that the measure
will fail. It offers four times as much money to those who bet on a
"yes," but only a 120-per-cent payout for betting on a
"no.", dpa reported.