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  • Economy: Pedro Sánchez maneuvers to raise pensions before 10-N

A functioning Government, limited by law to the processing issues, will approve the increase in pensions in December to link them to the CPI. An unprecedented fact that remains in the baggage of the Socialist Executive, along with the battery of social decrees that he promoted with the April elections already convened, and which has also been announced in full campaign as a claim to the vote of the pensioners.

Pedro Sánchez took advantage of an act of the PSOE to present some measures of the program to advance it. "This same month of December, we will update the 2020 pensions around the real consumer price index."

Without real possibilities that the decision will be executed by an Executive in full power - on 3 December the Courts are constituted, later the King will carry out the round of consultations to propose a candidate and the calendar is still narrowed more by the Christmas holidays-, Sánchez is about to do it on duty.

According to the Government law in these circumstances, the Executive practically limits itself to waiting: "It will facilitate the normal development of the process of formation of the new Government and the transfer of powers to it and will limit its management to the ordinary office of public affairs, refraining from adopt, except for duly accredited cases of urgency or for reasons of general interest whose express accreditation justifies it, any other measures ".

The legislator had this prevention so that an outgoing Executive did not make decisions that hurt the next. It cannot present Budgets or promote bills, it has no international agenda.

"We will raise them with a government in full capacity"

However, the Socialist Government has been thinking about how to approve its promised rise under the IPC for weeks. THE WORLD has already advanced its intention to approve it and that they made informal consultations to the State General Counsel . Sources of Moncloa pointed out then that the law allows it, according to its interpretation. The condition of "general interest" would be fulfilled.

The legal debate has opted in this regard. Moncloa understands that they can undertake it and the test, they said Monday, is that "the president has announced it." However, in an interview with Antena 3 on Monday night, Sánchez said that "we will raise them with a government in full capacity," without offering more information on how he intends to do so and keep the December promise.

In elections where polls have begun to question the improvement of the PSOE result, the Socialists have made a clear commitment to seduce retirees, a very relevant sector of the population of their electorate. The vote of the elders is fundamental for the socialists.

In total, the system recognizes just over eight million beneficiaries who over the last two years have mobilized to demand the repeal of the Pension Revaluation Index (IRP), approved in 2013 by the PP, which establishes a minimum annual increase of 0.25% of benefits, while Social Security is in deficit.

A total cost of 1,494 million

The measure implies that the Government hangs the revaluation medal and leaves the system reforms for consensus with the rest of the parties. With Social Security accumulating an annual deficit of 16,000 million euros, omitting the law and approving the second consecutive and extraordinary increase will have an additional cost of more than 1,100 million euros in 2020.

These are the estimates made by Enrique Devesa , doctor of Economics and full professor at the University of Valencia. This calculation is the difference between the cost of revaluating pensions by 0.25% (339 million) or doing so according to the CPI, which the Bank of Spain estimates will be 1.1% next year.

In total, the cost of Pedro Sánchez's promise amounts to 1,494 million euros, based on a total pension expense of 135,824 million euros -128,400 corresponding to contributory pensions and 7,385 to minimum supplements, revalued to 1.1% .

Taking into account other parameters such as temporary disability, net spending (CPI minus 0.25% current) would exceed 1,200 million, according to other sources consulted.

In any case, Devesa also focuses on the fact that the decision to raise pensions with the CPI will not only have an impact on the 2020 accounts, but is an expense that will be consolidated in the Social Security bill.

This is the impact in terms of actuarial value and, according to the estimates of the University of Valencia, the cost accumulated during all the remaining years of life of the beneficiaries will amount to 15,000 million euros.

According to the criteria of The Trust Project

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  • Social Security
  • Pedro Sanchez
  • PSOE
  • PP
  • General elections

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