The Government submits a pension reform for validation in Parliament without the endorsement of at least five key technical organizations that include the best study services in the country.
The Institute of Spanish Actuaries and Fedea issued this Wednesday, on the eve of the vote, harsh pronouncements against. They thus join the Independent Authority for Fiscal Responsibility and the governor of the Bank of Spain, who have already assured that the government decree does not balance the system’s accounts and generates more deficits.
The Institute of Spanish Actuaries, with weight to gauge the scope of any pension system, warns against approving a reform that “breaks the labor market.” “The Escrivá reform deteriorates tax equity and seriously hinders the sustainability of the system,” the association said in a statement and a report on the eve of the vote. “The reform, by adjusting the increase in contributions that falls, to a greater extent, on the youngest affiliates and/or with higher salaries, implies the deterioration of contributory equity,” he says.
For its part, Fedea pointed out that “as a whole, the reform that is now being closed will increase spending on pensions much more than revenue from contributions, condemning the public pension system to a basic deficit (before State transfers) important and rapidly growing (at least 2030 onwards, but possibly earlier) that will have to be covered by general revenue, leaving little room for other priorities.”
According to “urgency calculations” by Professor Ángel de la Fuente, the deficit could reach 5% of GDP, systematically above the Maastricht rules. “The text, which has aroused practically unanimous criticism from academic specialists and has generated doubts in AIReF and the Bank of Spain, would have deserved a more detailed, informed and serene discussion than it has had,” reproaches Fedea. For De la Fuente, the new system is born wrong from the start, because the expenditure observed or budgeted until 2023 “already shows a significant deviation with respect to the projections of the last Aging Report of the European Commission.”
As for Funcas, this Wednesday he relaunched an article by Elisa Chuliá already published in EL MUNDO that describes the decree as “one more than lost opportunity.”
The technical agencies are joined by innumerable economists. In a colloquium at the CES Cardenal Cisneros, the economists Gregorio Izquierdo, Daniel Lacalle and José María Rotellar were very critical of the insufficiency and negative effects of the reform decree. Also the vice president of ATA, Celia Ferrero, questioned the figures.
For its part, the PP confirmed its vote against the reform and that its leader, Alberto Núñez Feijóo, is willing to repeal it if it comes to Moncloa from 2024 due to the damage that the rise in contributions does to employment without ensuring sustainability . The PP confirmed what was published by EL MUNDO last Monday, that the European commissioner Paolo Gentiloni did not take Brussels’ endorsement of the reform for granted and that, in any case, he would stick exclusively to sustainability by including a mechanism of review every three years.
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