• Coronavirus.The Fiscal Authority corrects the Government: the deficit will be greater and the recovery of GDP and employment slower
  • According to AIReF, 1.2 million workers at ERTE will end up unemployed and will not recover their jobs this year

This year the Social Security system will suffer a historic deficit of at least 38,000 million. And in the Public State Employment Service (SEPE) the deviation, also at best, will amount to almost 17,000 million. In total, a gap of 55,000 million euros in the Social Security Funds revealed by the Independent Authority for Fiscal Responsibility (AIReF).

The Government did not want to specify these devastating data in the update of the stability program, something totally unusual and that the Executive justifies pointing out the notable uncertainties that the current context entails. However, the Treasury did offer a deficit forecast of 10.3% for the current year, data that in turn requires knowing the deviations of the different sectors of the Administration and, therefore, of Social Security.

May 2020. Deficit

But the body led by Cristina Herrero, in the examination it has carried out on the document sent to Brussels, not only corrects many of the estimates of the Executive, but it also figures the huge gap that will be registered by Social Security. In scenario one, the most "benign", the numbers are as previously noted, while in scenario two, which simulates a more adverse evolution of the coronavirus epidemic, the numbers skyrocket even more . The joint deficit of the Social Security Funds reaches 6.1% of Gross Domestic Product (GDP), that is, around 68,000 million euros. More than 43,000 of them would correspond to the Social Security system itself and the almost 25,000 remaining to SEPE.

"The Social Security Funds (FSS) increase their deficit in 2020 to a range between 5.0% and 6.1% of GDP depending on the scenario that materializes. The Covid-19 crisis has twice affected the FSS . on the one hand, the measures taken to alleviate the crisis and on the other, the worsening macroeconomic situation, and more specifically, employment, causing increased costs for benefits in cash and on the side of the income, a decrease in social contributions ", specifies AIReF.

And it is that the Social Security system must support measures such as aid to the self-employed and exoneration of contributions in the temporary employment regulation files (ERTE) approved by the Government, which will add to the collapse of contributions as a result of the crisis and, of course, the growing and unstoppable spending on pensions. All this will make the deviation go from the already important 1.5% of the GDP that the Fiscal Authority estimated before the pandemic, to between 3.6% and 4.8% updated, and not yet counting the possible efforts that the income requires minimum of the Minister Escrivá since, as Herrero criticized, "surprisingly" the Government did not include this measure in the documentation sent to Europe.

The SEPE, for its part, will go from estimating a surplus of 0.1% to a deficit of at least 1.5% . The reasons: the payment of the linked benefits received by workers in ERTE situations and also those of those who go into unemployment. According to the Government's own data, up to four million people will be led at some time this year to a regulatory file and another 900,000 will go on strike.

May 2020. Funds

AIReF also provides the figures for next year and, although the improvement is substantial, the deviation will continue to be very important. The gap for all Public Administrations will be between 7.5% and 9.4%, and in any case the Social Security Funds will bear a deficit of 3%. "In 2021, the situation improves, but the remaining balance will be between 1.8 and 2.6 points more than the -1.3 / -1.4 in which we had stabilized in recent years," underlines the agency .

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