The Spanish Government has charged this Monday from Brussels against the Employers for their opposition to the agreement reached with the European Commission for the last leg of the pension reform. After announcing at the end of last week that there was an understanding with the community institutions, and another within the coalition government, the Executive has presented the document to the social agents for an in-depth discussion within the framework of the social dialogue. And although the unions seem willing to join the plan, employers, as happened with the labor reform and other key elements, resist the terms that are on the table.
“We have been waiting for the employers since October. I want to remind you that when it was decided more than a year ago that the pensions would be revalued with the CPI, and that was reflected in a regulation, the employers, CEOE and Cepyme fully agreed. But when The time has come to explain how this is financed. We have not seen concrete proposals, at least I do not know them and we have been pending and we have requested them at various times”, lamented the minister José Luis Escrivá.
Escrivá was in the community capital at the same time as Vice President Yolanda Díaz, both to participate in an Employment Council, and Vice President Nadia Calviño, who had an appointment with the Eurogroup and Ecofin. The ministers want the businessmen to join, but right now they are much more focused on obtaining the support of the parliamentary groups, something to which Escrivá dedicated a good part of midday, after the European lunch, by telephone.
“You have to be tough and mature,” urged the head of Social Security to CEOE. “To make the system sustainable, which is what we are achieving with this reform, it is necessary to specify measures. It is very easy to say that this is not sustainable and not ask how it is addressed. I am waiting for concrete measures and I am hopeful that we can advance in the time that remains”, he added in reference to the next few days.
The pension reform, in what is intended to be achieved with the dual extension of the years of calculation and the increase in contributions for the highest salaries, is an essential part of the milestones of the Recovery Plan for Spain. To opt for the fourth disbursement of Next Generation funds, the technical agreement is not enough, but the measure must go through Parliament. And once it is law, the European Commission will evaluate it, as well as the sustainability of the whole. There are doubts in some organizations, and in the Commission itself, but even so, the political support in both capitals seems sufficient to move forward. If a new reform has to be made, and it is possible that it will be inevitable in a few years, it will be a political problem for others. Brussels knows this, but also that with Parliament, the unions and the current employers’ association, there is not much more room.
In Brussels, the government’s direct attacks on organizations such as Fedea, the Foundation for Applied Economics Studies, financed among others by some of the large Ibex35 companies, have also surprised. Escrivá has long been an enemy of his reports and especially of some of his experts and collaborators in pension matters, such as Miguel Ángel García (former head of studies at CCOO but who was also director of Social Security and part of the government of the Junta de Andalucía with Ciudadanos), Ignacio Conde-Ruiz (also president of the Forum of Experts of the Santalucía Institute) or the person in charge, Ángel de la Fuente. The first two were part of the group of experts that carried out the 2013 pension reform, with the sustainability factor, and Escrivá does not hide his contempt for his ideas, his reports, or his doubts about his independence and objectivity.
This same Monday, Fedea has sent a note regretting that “the current reform condemns the contributory component of the public pension system to a high and rapidly growing basic deficit (before transfers) over the coming decades, which will require large and increasing contributions from general resources that could leave little room for other priorities”.
In his letter, De la Fuente denounces that in 2019, the last year before the Covid crisis and the beginning of the transfer of its deficit to the State, Social Security had a deficit of 1.3% of GDP. According to the Spanish Government’s own forecasts for the latest Aging Report, this figure would rise to 2% in 2050 in the absence of policy measures and an additional 3.5 points as a result of the first phase of the pension reform, reaching 5.5%. “All in all, around 2050 we would have to inject extra resources into Social Security each year worth about 4.5 points of GDP, which would mean around 60% of personal income tax collection (which in 2019 was 7 .56% of GDP). Such pressure will leave little room to finance increased spending on almost anything else, including healthcare and dependency, with rapidly growing needs due to rapidly aging populations.”
For the minister, these calculations are not reliable, little more than a professor with his computer against a team of real experts. “I have not read that report and I don’t know… but I have seen previous positions and superficial, very unsophisticated analyzes have appeared to me, it is an exercise that someone does with their computers in front of the entire team of statisticians, actuaries and experts from the Social Security and the Commission, who have looked at it from all angles. What we have done is robust and solid and has the support of very powerful institutions. Faced with that…”, Escrivá has settled.
But he has not been the only one. De la Fuente is listened to in Brussels and is in direct contact with community technicians, who listen to him as well as other Spanish institutions and prestigious study services. And that is not liked in the Executive. “I am going to say the following to Fedea. There are two precepts of the constitutional text that talk about social protection and pensions and talk about the sufficiency of pensions, that is what Fedea should be concerned about. The Government complies with it and the pensions they will be guaranteed and will be sufficient. Sufficiency is the mandate. I would like Fedea and other organizations to ensure that compliance,” Vice President Yolanda Díaz also joined from the EU Council headquarters. “I want to remind these people from Fedea that the constitutional system is based on solidarity and distribution. It seems obvious, but some people forget this. The agreement is great news for the country and for the social Europe that we want.”
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