Brussels warns Spain that linking pensions to the CPI risks its sustainability


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The European Commission has warned on Wednesday that permanently link pensions to the CPI evolution compromises sustainability of the system in the medium and long term, while underlining that these measures would favor, without compensatory measures, current pensioners to the detriment of new generations.

Brussels, in particular, warns in its report on the Spanish economy of the consequences that the plans of the Government of Pedro Sánchez could have to permanently link the evolution of pensions to the CPI and "dissociate" their levels to changes in the hope of life of the Spanish population.

«Eliminating both elements of the 2013 reform runs the risk of benefiting today's pensioners at the expense of future generations, unless compensation measures are taken ”, remarks the document.

"If the changes with respect to the 2013 pension reform were made permanently and without adequate compensation measures, pension spending would grow significantly and intergenerational equity would worsen in the medium and long term," he adds.

The text, in fact, points out that even by "fully" implementing the 2013 reform, Spanish pensioners would continue to have a replacement rate higher than the community average in the long term.

In particular, the services of the Community Executive estimate that linking pensions to inflation again could lead to an increase in pension spending by 2050 of approximately 4% of GDP. In addition, abolishing the sustainability factor would add «at least» 0.7% of GDP to long-term pension spending.

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