With a proposal that generated less controversy than the French one, Spain approved a reform in its pension system

On a par with France but with fewer controversies, Spain approved a reform in its pension system (REUTERS) (Juan Medina /)

In the midst of the tense atmosphere that unleashed in France the executive’s proposal Emmanuel Macron to reform the pension system, Spain he did the same but in peace and silence.

This Thursday, the government of the leftist Pedro Sanchezapproved a decree to reform the retirement calculations with which “the modernization of our system and We shield the purchasing power of all present and future pensioners”, assured the Minister of Social Security, Jose Luis Escriva.

The project was approved in an extraordinary meeting of the Executive of the left-wing coalition and has the endorsement of the two main Spanish unions –UGT and CCOO– and the European Comission which, for a long time, required this measure to be able to continue with the disbursement of the European recovery funds economic after the coronavirus pandemic.

Specifically, the reform includes measures to increase the income of the pension systemamong them, the progressive increase in the maximum contribution base of 4,495.50 euros per month in 2023 and that, between 2024 and 2050, it will be updated each year according to the consumer price index plus 1.2 percentage points.

Also, it is anticipated intergenerational equity mechanism with an increase in social contributions from this year, to go progressively from 0.6% to 1.2%.

Escrivá explained that with this reform the modernization of the system culminates and the purchasing power of all present and future pensioners is shielded (Europa Press)
Escrivá explained that with this reform the modernization of the system culminates and the purchasing power of all present and future pensioners is shielded (Europa Press) (EUROPA PRESS / A.Ortega.POOL – Eur /)

Escrivá stated during the press conference that, with these measures, the reserve fund that guarantees pensions will reach about 120,000 million euros in the early 2040s, which will allow guarantee the viability of the system in a country where a strong increase in pensioners is expected when the baby boomers.

This fund had been decreasing in recent years, remaining in an expense that represents almost the 12% of its gross domestic product -approximately 12,000 million euros per month-. This number covers more than nine million beneficiariesin a country of more than 47 million inhabitants and with a low birth rate -in a downward trend- that estimates 1.2 children per woman of childbearing age.

This decision was rejected by the Spanish employer which considers that the tax burden on employers and workers while the right-wing opposition it reproaches the Government for not having agreed on it with a view to the future.

Sánchez's proposal was rejected by the Spanish employers and the right-wing opposition (REUTERS)
Sánchez’s proposal was rejected by the Spanish employers’ association and the right-wing opposition (REUTERS) (SUSANA VERA /)

In regards to the retirement agethis was not affected by the recent reform, so a person must have a minimum of 65 years to access this pension in Spain. However, the number is expected to rise to 67 in 2027with a minimum contribution period of 37.5 years.

This had already been delayed two years in 2011 by the government of socialist president José Luis Zapatero during the financial crisis that was plaguing the country.

The proposal, less controversial than the French one

Unlike the project approved by Emmanuel Macron, the Spanish reform did not provoke the strong repudiation of society or lead to strikes and massive stoppages.

France has experienced intense days of strikes since January 19 (REUTERS)
France has been experiencing intense days of strikes since January 19 (REUTERS) (STEPHANE MAHE /)

In this regard, Escrivá explained that this difference was due to the fact that France took too long to modify its system for the “42 privileged special regimes in pensions”.

“France has a pension system that is not sustainable. He hasn’t addressed it for decades.”began by mentioning and pointing out that at not having taken the respective measures “on time”, now it must do so through “cuts” that “generate social resistance”.

(With information from EFE and AFP)

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