The Government has failed miserably with the reforms of the Recovery Plan, with a balance that is "very disappointing" and actions that "point in the opposite direction to what would be desirable, while others are almost empty of content or fall short". This is what the Foundation for Applied Economics Studies (Fedea) concludes in a harsh report published yesterday, and in which, in addition, it anticipates that the next Government will have to face a new pension reform after the "false closure" of the one devised by the Minister of Social Security, José Luis Escrivá. And it also warns that the new Housing Law opens the door to "expropriations" following the model of Catalonia.

Pension

"The public pension system will need further reform in the coming years." Angel de la Fuente, director of Fedea, author of the report and one of Spain's most respected economists, is very clear on this point. He anticipates, therefore, that the Executive that comes out of the next elections will have to address a new reform, discusses many of the figures offered by Escrivá and, in short, maintains that it is one of the "most paradigmatic and worrying cases of poorly planned reforms." For example, the option that the worker, at the time of retirement, chooses whether he wants to calculate his benefit with the current system or with an alternative option in which the calculation is extended to 29 years but the 24 months with less contribution base are discarded. "Clearly, the measure can only increase spending with respect to the previous model, since only those who obtain a higher pension with this option will opt for the extended calculation period," says Fedea.

In addition, there will be "a gradual increase in the maximum contribution bases to Social Security between 2024 and 2050, accompanied by the quasi-freezing of maximum pensions at constant prices", and a new "solidarity quota will be applied that will tax the part of wages that exceeds the maximum contribution base to a range of tax rates that will gradually rise until the central rate reaches 6%". All this will raise income, yes, but in an amount that will be far from the needs that the system will have after the indexation of pensions to the CPI. Nor will the "misnamed Intergenerational Equity Mechanism [MEI]" be enough because the activation of this adjustment mechanism "would leave the public pension system with a still very important basic deficit: 3.2% of GDP on average between 2022 and 2050 and around 5% in 2050".

Housing Law

"Counterproductive", generates "legal uncertainty", "reduces supply" and even opens the door to "expropriations". If De la Fuente's assessment of the pension reform is devastating, his conclusions on the new Housing Law are no less so. The measures introduced "with the laudable objective of protecting housing applicants", will "certainly have adverse effects on the private rental offer, thus aggravating the problems that in principle are sought to be solved and failing in passing the mandate of the law to promote supply". Among these actions, the "control of rents in areas considered stressed by local or regional administrations, the imposition of general limits on the annual updating of rents and forced extensions after the expiration of contracts".

The Minister of Social Security, José Luis Escrivá.E. P.

All this lowers "the profitability of investment in housing for rent or increases its perceived risk", and we must still add the aforementioned "legal uncertainty" caused by the "vague" wording of the standard. Specifically, Fedea names two provisions with which the Executive seeks to "guarantee the social function of property" but whose wording "could be interpreted in a way that allows Administrations to impose unreasonable obligations on owners, including renting their properties at prices below market prices, or even expropriating such properties as has already been announced in Catalonia ". In the Catalan case, this measure contemplates the expropriation of empty flats from large holders.

Civil Service Law

This rule has declined as a result of the electoral advance decreed by the President of the Government, Pedro Sánchez, but Fedea includes it as another example of reformist malpractice by the Executive. The most outstanding thing for De la Fuente is that it distorts "the role of the new performance evaluations while introducing new elements of rigidity that will have effects contrary to those supposedly sought." At first, the norm contained tools so that officials could even lose their jobs if they did not perform their job well, but this point was withdrawn when the text reached Congress under pressure from officials and unions.

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