The Government of
Pedro Sánchez
will have to face an important political and economic dilemma in the preparation of the Budgets for 2022, if it wants to fulfill its promises with pensioners and employees and the public.
Either comply with them, or collide with the European Commission.
The Bank of Spain announced yesterday that it foresees an average inflation in 2021 of 1.9%, much higher than the 0.9% that has risen to pensioners and public employees this year. Therefore, if the Bank of Spain is correct and the Government wants to guarantee purchasing power for both, it must increase 1% to both groups
with an additional cost of about 1,300 million for pensioners and another 1,400 for public employees.
But there is more. The Minister of Social Security,
José Luis Escrivá
, defends based on the CPI of the previous year for the increase of the following year, so that pensions should be revalued by about 2%! in 2022. And the Minister of Territorial Policy
, Miquel Iceta, will
try the same with public employees. The joint effort could approach the cost of 5,500 million that year alone for the public coffers that, moreover, would remain structurally, despite the fact that, according to the stability plans presented to Brussels,
no country has a chronic deficit greater than the of Spain,
higher than 5% of the Gross Domestic Product over a long period.
Raising pensions and public salaries would be logically expected and appreciated by retirees and civil servants, who claim losses in purchasing power in recent years, but would deepen the hole in public accounts and generate a conflict with Brussels.
The European Commissioner for Economic Affairs,
Paolo Gentiloni
, already declared on June 2 to this newspaper that "the most indebted countries should not raise public sector salaries or pensions now." According to Gentiloni, it is one thing that the euro's deficit control rules have been suspended to increase specific expenses due to the pandemic and another that the countries with greater imbalances launch themselves into more structural expenses. In his opinion, with such high debts and deficits, the priority should not be these increases in structural spending, but rather "those connected to the proper use of European funds."
Already last year the governor of the Bank of Spain,
Pablo Hernández de Cos
, unsuccessfully warned about the risk of increasing these items, especially for officials, while the large deficit generated by the pandemic is not wiped away. Community sources consulted bet that the items for pensioners and public employees will be examined with particular emphasis, because they constitute a touchstone to measure the political will of governments to combat the deficit.
Another test for the European Commission will be the reform of the pension system in which, according to Escrivá himself, it would be necessary to delay the effective retirement age and other adjustments to save the equivalent of about 30,000 million euros today. However, the Minister of Social Rights and new leader of Podemos,
Ione Belarra
, spoke last Sunday in the opposite direction by adopting after her election as the successor of
Pablo Iglesias
, on pensions with a program in which "we stop raising the retirement age and move it forward, with decent pensions for older people who have been working all their lives."
Raising the retirement age would not only violate the lack of specificity in the Recovery Plan presented to Brussels, but would also exacerbate the imbalance in the Social Security system.
Many promises of all kinds within the coalition government.
According to the criteria of The Trust Project
Know more
European Comission
Pablo Iglesias
Social Security
We can
Ione Belarra
Spain
Jose Luis Escrivá
Pedro Sanchez
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