The president of the Economic and Social Council (CES), Antón Costas, does not believe that raising wages currently poses a risk for inflation and has asked to respect the consensus reached in the Toledo Pact and embodied in the pension reform to raise pensions according to the CPI. In other words, the professor of Economic Policy and current president of the Government's advisory body on socioeconomic and labor matters does not share the recommendation to include pensioners in a possible "income agreement", as suggested by the Bank of Spain and some opposition groups.
Inflation picks up again in May to 8.7% due to the rise in fuel and food
"Today, with the data we have, I do not see a great fear that salary increases could produce a spiral of prices," Antón Costas explained in statements to the media in the Congress of Deputies, collects the Europa agency Press. The president of the CES has gone to Parliament to deliver the council's 'Annual Report 2021' to the president of the Lower House, Meritxel Batet.
The president of the CES has pointed out how the salary increases agreed both in 2021 and so far in 2022 have not managed to compensate for the increase in prices. In other words, workers are accumulating a loss of purchasing power in the face of wages that lag far behind the rise in prices. Bank consumption data is revealing that families are cutting spending in the context of skyrocketing inflation.
Until May the difference between agreed wage increases and the registered inflation is “of six negative points”, the professor has recalled. "I do not see, at the moment, I insist, that there is an inflationary spiral in Spain due to a reaction of wages", said Costas.
Regarding inflation, he indicated that the main consequence of the war in Ukraine is the increase in energy prices, for what he has defended the cap on gasnot yet applied and is awaiting the final approval of the European Commission.
Against the criteria of the Bank of Spain
Antón Costas has asked that there be “fair rules for the distribution of costs brought about by the crisis”. On a possible income pact that includes pensioners, limiting the annual rise in pensions due to high inflation, the president of the CES has distanced himself of the opinion of the Bank of Spain.
The professor has called for maintaining the political consensus reached in the Toledo Pact, which recommended that pensions be revalued according to the CPI and which was later backed by a social agreement with the unions and employers.
"I would not include pensions as one of the basic instruments to control inflation," he asserted. Costas has recalled that "the average pension is 1,034 euros and below the average there are many low pensions."
In this sense, the president of the CES has asked to distinguish between inflation and the sustainability of the public pension system, an issue for which he does not see any type of risk. "Neither in sustainability nor in sufficiency, which are the two great criteria to which a fair and equitable system must respond," he said, according to Europa Press.
The fuel discount "is not fair"
“When there are fair distribution rules for the costs of a crisis and economic and social policies are well designed, a kind of virtuous circle is produced”, assured Costas, who has given as an example how –despite not achieving a full economic recovery – Spain has been able to reduce the deficit and the debt, reaching record revenues in the Treasury and Social Security.
The president of the CES has requested that the support measures "must be selective" and target households with less income and companies that are more dependent on energy. In this sense, he has questioned the feasibility of maintaining a general discount of 20 cents on the price of fuel, since he believes that this measure favors people with more resources.
“It is not an equitable measure nor, probably, is it efficient to reduce the consumption of a good, such as gasoline, which we will necessarily have to reduce consumption and pay a little more expensive for it,” he argued.