12 ANDREJEVA v. LATVIA JUDGMENT (1) On 4 May 1990 the Supreme Council ... adopted the Declaration on the Restoration of the Independence of the Republic of Latvia (‘the Declaration’). Paragraph 8 of the Declaration contains an undertaking ‘to guarantee social, economic and cultural rights, as well as political freedoms corresponding to the universally recognised provisions of international human rights instruments, to citizens of the Republic of Latvia and citizens of other States permanently residing in Latvia. This shall fully apply to citizens of the USSR who wish to live in Latvia without acquiring Latvian nationality’. On 29 November 1990, six months after adopting the Declaration, the Supreme Council ... passed the State Pensions Act. Entitlement to a State pension was granted to all persons residing in the Republic of Latvia whose place of residence at the time of the Act’s entry into force on 1 January 1991 was in Latvia. The Act provided for the right to social cover in old age. It referred to two types of State pension: employment pensions ([including] retirement pensions ...) and social welfare pensions. Anyone covered by the social-insurance scheme of the Republic of Latvia was entitled to an employment pension. Anyone not entitled to an employment pension was guaranteed the right to a social welfare pension under the Act. Accordingly, for the purposes of the Act, the terms ‘State pension’ and ‘social cover in old age’ were identical. By section 44 of the Act, ... stateless persons who had arrived in Latvia from another country and had not been employed by enterprises or institutions of the Republic of Latvia received their pensions in accordance with agreements signed with the State concerned; in the absence of such an agreement, they were to be granted a social welfare pension. Thus, pensions were calculated according to the same rules for both of the above-mentioned categories ... The pension system established by the Act was based on ... the principle of redistribution (solidarity), which did not encourage any interest on the workers’ part in ensuring their own old-age cover. As Latvia strengthened its independence as a State, it soon became necessary to develop a new pension system complying with the principles of the European Union. Having assessed the country’s economic and demographic situation, the available resources and other circumstances, on 2 November 1995 Parliament passed a new Act with the same title ... which came into force on 1 January 1996. Paragraph 1 of the transitional provisions of the Act provides that the period to be taken into account in calculating the State pensions of foreign nationals and stateless persons who were resident in Latvia on 1 January 1991 comprises their aggregate periods of employment in Latvia or periods treated as such. Periods of employment outside Latvia before 1 January 1991 and periods treated as such are not taken into account in determining the relevant period for pension calculations ... The pension scheme introduced in Latvia has been favourably received at international level. There has been a positive assessment of the radical change in relation to the traditional principle of solidarity between generations: money earned by the working generation is paid to current pensioners, but at the same time the insurance principle is applied, whereby people build up their own funds towards their pension. ... International experts acknowledge that it is not possible to resolve all social issues by means of the pension system, as any effort to do so will only create problems endangering the system’s long-term stability ... In passing the State Pensions Act, Latvia has adopted principles based on insurance premium payments in respect of ... State pensions, including the rule that the amount