June 20, 2021

The Government hardly details the pension reform that it will send to Brussels and does not mention its plans to increase the calculation period


The economic vice president Nadia Calviño explained this Friday that the Executive is finalizing two packages of reforms, in labor and pension matters, which it intends to send to Brussels “as soon as possible”, but of which it has barely offered details. Neither the leaders of the social agents, with whom he held a high-level meeting this morning in which six other ministers participated, nor the press in the post-meeting conference. Minister Escrivá has outlined the general lines of his promised pension reform, according to sources at the meeting, but has not referred to your plans to extend the pension calculation period to 35 years of contributions. According to sources from the Executive to elDiario.es, this extension of the term to calculate the pension is included in the draft that the Government prepares to send to Brussels.

Increasing the years of contributions to calculate the pension while the Rajoy reform is dismantled: the Government's negotiation in Brussels

Increasing the years of contributions to calculate the pension while the Rajoy reform is dismantled: the Government’s negotiation in Brussels

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Calviño has appeared before the media after the union leaders of CCOO and UGT, Unai Sordo and Pepe Álvarez, and of the employer Cepyme, Gerardo Cuerva. The unions have criticized that the Executive has not provided them in writing the proposals that the Government will send to the Commission, for which they have insisted on requesting the documentation. Sordo and Álvarez have underlined the need for transparency to know exactly in what terms Spain is committing to the EU in this scheme of reforms linked to European funds for recovery. Both have demanded that the texts do not restrict social dialogue, that they do not leave the negotiating tables “without oxygen,” emphasized Unai Sordo. “If there is no margin for dialogue, don’t count on us,” Pepe Álvarez insisted.

The union leaders, as well as the president of the employers’ association of small and medium-sized companies (Cepyme), have recognized that the ministers have barely specified the reforms that the Government is going to take to Brussels, beyond listing some general thematic lines. In the labor field, the Minister of Labor, Yolanda Díaz, has mentioned reforms to “modernize collective bargaining”, to reduce the modalities of contracts and temporality in the labor market, as well as to transform active employment policies, among others. Díaz had already met this week with the leaders of the social agents to present his roadmap.

Regarding pensions, Minister José Luis Escrivá has presented to the social agents the general lines of his promised reform, with measures such as the restriction of early retirements and the promotion of the extension of working life beyond the retirement age. These proposals have already been disseminated by Escrivá on numerous occasions and formally presented by Social Security at the dialogue table on pensions that exists with unions and employers.

However, the minister has not referred to another measure that focuses all eyes: his plans to extend the period for calculating the pension to 35 years of contributions, already published by numerous media since mid-December and confirmed again this Friday by sources from the Executive to elDiario.es. This measure is present in the draft pension reform prepared by the Government for Brussels, these sources explain. The change represents a ten-year jump in the period taken into account for calculating the pension and that, on average, involves a reduction in future pensions (with some exceptions).

Calviño: The reforms “are not closed”

The minister has not referred to this measure before the social agents, although sources at the meeting point out that Escrivá has mentioned “a second package of measures that Social Security is evaluating”, which he has not detailed.

The economic vice president for her part has not clarified in the press conference after the meeting if the extension of the calculation period is present in the Government’s draft and has repeated that the document is not yet closed. “We are not in a phase in which a final decision on the different elements has been made,” he said, although he acknowledged that the Executive finalizes the work to send the reforms “as soon as possible.

The documents will be sent to Brussels shortly, perhaps even next week they indicate from the Executive and, therefore, before the social dialogue on pensions ends, but Calviño has insisted that the first line of action does not limit the second . The vice president explained that what will be sent to the Commission are the elements that will later be discussed with unions and employers.

Nadia Calviño has limited herself to stating that “what is clear” are “the priorities of our government in the field of pensions: guaranteeing the purchasing power of pensions and the sustainability of the system, both in the short, medium and long term. term”. These priorities are “absolutely aligned with the recommendations of the Toledo pact,” the vice president specified. The unions recall that the Toledo Pact does not contemplate in your recommendations the extension of the pension calculation period.

Internal and external tension in the pension reform

The Government therefore will close “as soon as possible” these two packages of reforms, although sources of the Executive place the main conflicts in which it refers to pensions. Despite the internal friction that there has been in the Executive on the dismantling of the labor reform, the different “souls” of the coalition have reached an agreement on the text that they will send to Brussels on the reforms of the labor market.

The text is expressed in quite broad terms with a focus on the “modernization” of labor legislation, for example in matters such as collective bargaining and the reduction of precariousness and temporality, in which the parties understand that the agreement of government between PSOE and United We Can.

But the pension reform is another story. Government sources confirm that the extension of the calculation period is present in the document that the Government manages today, despite the resounding rejection of the United We Can ministers. The formation led by Pablo Iglesias has already announced that it will not support the measure in the parliamentary process and Minister Yolanda Díaz reiterated this week that the ‘purple’ ministers “will not accompany” this change, which they consider “a cut” in pensions.

The unions also do not share the measure and assure that they will not accept it at the dialogue table. As an alternative, they propose to focus the modifications on initiatives that increase Social Security income, that balance the increase in pension spending in the coming years in which the baby-boom generation retires and it is intended to recover the revaluation of pensions according to the CPI. The “cuts”, CCOO and UGT insist, are not the only solutions to guarantee the sustainability of the pension system.

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