The Minister of Economy, Nadia Calviño, does not see clearly that pensions are updated every year taking into account only the CPI. "I have always said, and it is the Government's position, that this is an issue in which we can not only look at one parameter, such as, for example, the updating of pensions to the CPI," he explained at the end of the meeting. finance ministers of the European Union, Ecofin, on Tuesday.
These words come just a week after the Pact of Toledo agreed to recommend just that, that the annual review of pensions should be made "based on the CPI" each year. It adds to what the same Secretary of State for Social Security, Octavio Granado, said hours before he announced that agreement.
For Calviño, it is necessary to analyze the sustainability of pensions taking into account "a whole series of variables", such as demographic evolution, employment, salary level, number of years of contribution and characteristics and replacement rate of pensions. According to her, this vision is "wider" than that of the Toledo Pact. "It is an area in which it is essential to guarantee decent pensions now, but also to guarantee that they will remain worthy within 20 or 40 years, and that is the objective of the Government," he said.
Calviño launched these words in Luxembourg and goes on the line to point out that Spain is not like Italy. That is the message he emphasized after the first assault yesterday that the finance holders of the euro zone untwisted against the plans of expansion that the Italian Minister Giovanni Tria took to the Eurogroup. "The Spanish government is taking all possible measures to avoid the contagion effect," said Calviño. The main actions, he has maintained, go on to continue reducing the deficit of public sector accounts, giving priority to social spending, and "accelerating" the process of reducing public debt. The minister closed ranks with the European Commission and agreed with the rest of her colleagues that "the rules" should apply "equally to all countries."
Spain is not Italy
In the absence of knowing all the details of the budget of Giuseppe Conte's government, Calviño has pointed out that the main difference between one and the other executive is his strategy regarding public debt: while the Italian plans, in his opinion, would lead to a "path If we do not reduce it, "Calviño is betting on stepping on the accelerator in the reduction of the weight of Spanish obligations with respect to the Gross Domestic Product (GDP). "I'm relatively calm because we did not see a contagion effect. International investors trust in Spain, "the minister said.
Calviño has desgranado his prescription to be able to reduce the level of Spanish indebtedness, that at the closing of the first semester was of 98.1% of the GDP. In this regard, the minister called for obtaining a "primary surplus" in public accounts, which said that it will arrive "for the first time" since the Great Recession in 2019 after making the structural adjustment announced in the public accounts equivalent to 0.4% of GDP. Marking again differences with the Italian executive, has insisted on the commitment of the government of Pedro Sánchez with "budget discipline."
"The framework with which the Spanish government works for 2019 includes a structural adjustment of 0.4% and therefore it is not about expansive budgets," he concluded. For example, it has opted to reduce the "cost of maintaining the debt", through early repayments such as the return of 3,000 million euros to the rescue fund (ESM) last September "taking advantage of the good moment of the financial markets" .
Finally, Calviño explained that work is also being done to improve "treasury management" to make it "more efficient and reduce, in this way, the public debt issuance needs.
In his appearance after the meeting of ministers Finance of the Twenty-eight in Luxembourg, Calviño wanted to point out the differences between the Spanish and Italian economy that, for now, are stopping the dreaded contagion effect. The minister has emphasized the improvement of the Spanish economic and budgetary structures, but especially in the "reorganization of bank balances" and the lesser "interconnection" between the public sector and financial institutions.