GREY EXPECTATIONS FOR SPAIN'S PENSIONISTAS

News

Kevin Reardon / 2010-02-07 10:37:37

Grey Expectations

Spain is proposing to raise the state retirement age from 65 to 67, so said the Minister of Work and Immigration, Celestino Corbacho, in a statement to the press last week.

He said that it was the only possible way by which the country could guarantee the future of the pension system beyond 2030. He stated that “it is necessary to postpone the retirement age if we truly want to guarantee sustainability for the pension system in 25 or 30 years time”.

By 2049 almost one in three people in Spain will be 65 years or over, double the present level, if the present aging demographic continues, the National Statistics Institute said earlier.

The Minister said that “this is not a done deal; it is not a piece of legislation” insisting that it will still be necessary to debate the proposals far more than has already been done. He said, “Once we reach a consensus and the broadest possible agreement, then that will be the time to establish the details regarding the scope of the pension reform”.

Mr Corbacho explained that the steady rise in the number of new pensioners means that reform of the system is essential for the years to come. “The Council of Ministers now have a report referring, as the Government has been saying for several months, to the current good state of health of the pension system. The Reserve Fund contains 60,000 million euros and ended the last financial year with a surplus of more than 8,000 million euros”, he added.

The document presented is the result of several studies, of a parliamentary resolution from the Lower and Upper Houses [Congreso and Senado] and from a commitment by the Prime Minister himself in Parliament. According to Corbacho, “this report shows that there is no need to reform pensions to give an immediate response to the system but there is if we want to guarantee pensions for the next 30 or 40 years”. Among the measures “with the greatest media impact” is the postponement of the retirement age from 65 to 67, the details of which are yet to be finalised.

The proposal responds to the need to maintain the financial health of the system and to the proposals made by the participants in the Toledo Pact. The Minister asked for prudence and composure when working on the proposal, “let it be analysed, let’s see what all the political teams have to say on the issue and let’s work on it together to reach a consensus”.

He also referred to the early retirement of workers from companies with profits and stated that those companies should assume the cost of such measures without resorting to public financing, an issue also covered by the document to be assessed today by the Council of Ministers.

As regards the data from the Active Population Survey (EPA), Mr Corbacho recognised that the results are not positive “although they do show the levelling off of job losses in this last quarter, which is something the economic forecasts of the Government had predicted”.

The Minister believes that the rate of job losses will slow as the economy improves until a situation of growth is achieved in which net employment will rise.

“Government forecasts are being proven correct and we therefore expect to see the start of economic recovery this year and an exit from the crisis we have been suffering over the course of these last two long years, as has also been forecast by the Government”.