Alert for the cost of aging: Spain will be the second country with the highest pension spending in the EU in 2050

• Escrivá negotiates a pension reform that, according to Fedea, will leave a hole of 3 points of GDP

Spain

is the

that allocates a

to the payment of public

, specifically

with data from 2019, compared to

used on average by community countries.

Our country is behind Greece, Italy and Portugal -which exceed 15%- and France, Austria and Finland -with 14.7%, 14.1% and 13.3%, respectively-, but ahead from all the others and, by

, it will rise to

warns

in a report published this Wednesday, in which it not only classifies the countries by their volume of spending on pensions but also explains why each of them allocates one proportion or another.

For example, in

spending is higher than in Spain because their

-representing the average pension for the average salary- are higher;

while in

it is due to the fact that its

-the population protected by a pension- is higher.

Some of the characteristics of the pension system in Spain would justify spending on GDP that is lower than in other EU countries, such as the demographic factor -since

than in other states-, the

- There are countries like France that cover a greater proportion of the population and here the staff covered will decrease as the retirement age increases- or the

-which is much

in the case of Spain-.

By having

than in the rest of the European countries, the citizens who retire receive

, which implies that public spending on pensions for this reason will be lower than that of those countries in which salaries are very low. tall.

"Spain presents a level of participation of wages in GDP that is situated in the lower part of the distribution of the EU countries, which would result in lower spending on pensions. For example, said participation is

or

.

There are, however, European countries where the share of wages in GDP is smaller than in Spain.

For example, said variable is 23.2% and 19.7% lower in Greece and Italy, respectively," they point out.

GRAPH 2

Fewer workers and more generous pensions

"The demographic factor, the coverage rate and the share of wages in GDP would explain substantially lower spending in Spain compared to the weighted average of the EU, in particular

", explain

, from the Department of Structural Analysis and Studies of the Bank of Spain.

However, these factors that could invite Spain to drop positions in the European ranking of pension spending are overshadowed by others that have more weight.

"This lower spending would be

, which, together, would explain

more spending than the European average."

The first of these is the

in the country,

, which implies that only half of the population of working age is actually employed.

As there are much

in comparative terms, the production capacity of the country is lower and, therefore,

.

Being the denominator of spending over GDP, the lower the resulting ratio is larger.

The supervisor warns that even

to the

level , which would imply an increase of 18 points, up to around 70%, that would only serve to

on pensions due to the aging of the population.

Secondly, Spain is the third country in the EU with the

, only behind

which also contributes to having a comparatively higher volume of spending.

Complicated outlook from now to 2050

Looking ahead to the coming years, Eurostat places

with the

, from

"This factor would exceed, according to these projections, that of France in 2037 and that of Germany in 2039, and the difference observed in 2019 with respect to those of Portugal and Italy would be reduced by 25% and by 67.7%. , respectively, in 2050. In this way, under the demographic factor projected in 2050 and keeping the rest of the factors constant,

(after Greece and Italy), compared to the seventh position it occupied in 2019", they point out.

Just due to ageing, assuming that there are no improvements in the coverage rate or the benefit rate, Spain will become the country with the third highest expenditure on pensions as a percentage of GDP in the EU, but if there are

-the population protected by a pension- as

"Spain would become

the EU, only behind Greece".

This report concludes that the coverage rate will grow by 2 points between 2019 and 2070 driven by greater protection for the older groups and a somewhat lower level for pensioners due to the delay in the effective retirement age.

"Eurostat's demographic scenarios anticipate a

-in absolute terms and in comparison with other EU economies- in the

society

over the next three decades, which will mean significant upward pressure on our spending on pensions Slightly more than 40% of said increase could be offset if, in the coming years, Spain reached an employment rate similar to that of the most advanced European countries in this dimension", points out the institution directed

According to the criteria of The Trust Project

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