The pension reform has shaken the recovery plan

The European Comission approved the payment of the third tranche of European aid to Spain, amounting to EUR 6,000 million. And he did this despite the fact that the second phase pension reform almost two months behind the deadline given in the recovery plan. A plan that is progressing, generally speaking, at a good pace, but could falter if this bottleneck is not resolved soon. Because? The government should request the fourth aid tranche (10,000 million) before the summer. And to get all that money, without delays or partial payments, you need to do your homework. This is required by the minister of Social security, Jose Luis Escrivapress the button to harmonize the requirements of Brussels with the requirements of social entities.

“We are concerned about the pension reform because we believe it is going in the wrong direction. The priority is to ensure the sustainability of the system and what has been done so far compromises it,” he warned this Thursday. angel of the fountainexecutive director of the analysis institute Fedea. He did this at a conference he organized General Council of Economists (CGE) in which an overview of the execution of funds is given The EU of the next generation in Spain and Portugal.

According to De la Fuente, the first phase of the pension reform eliminated automatic spending control mechanisms, such as the controversial sustainability factor, which sought to modulate benefits on life expectancy, leading to their cuts. “This leaves us in a difficult situation for the future. Pension spending, which will accelerate in the coming decades, threatens to eat up the entire budget margin for other items such as health and addictions,” he explained. It is calculated that the country will have to set aside 3.5% more of its annual wealth for pension payments in 2050.

CGE experts agreed on this point and requested a overview of the reform “with the aim of delivering new tranches of European funds”. And that is that the European Commission wants irrefutable evidence that the reform will contribute to the elimination of the deficit caused by the current model.

What do they suggest? De la Fuente called on Escrivá to look for other formulas so as not to increase the bill because the removal of the limit on maximum contributions may not be enough: “The introduction of an additional tax on personal income for everyone would create more pressure to take measures to control spending,” he slipped.

This is not the only concern of economists, who also warned of legal security problems that the draft housing law if you finally introduce measures like rent price control.

Expansion

“The possibility of extending the deadlines should be considered”proposed by the president of CGE, Valentin Pich. The money paid out by Spain is taking longer than expected to reach the final recipients. And it can be a problem to execute funds on time. Portugal also faces bottlenecks. Former Portuguese Minister of Planning (2018-2022), Nelson Desouza, advocated joining forces of both governments and asking Brussels for more time. How long would it take them? According to De la Fuente, “with a few more years we should be able to do that, but even an extra year would be very useful.”