Ángel Collado
Pedro Sánchez has reached an agreement with Brussels on the Spanish pension system that exempts it from its structural reform and recharges its maintenance on new tax and contribution increases.
The left-wing coalition government, divided and in crisis for months, is reconciled with a pact that postpones the cuts, assures it the applause of the trade unions and will allow it to pay its most populist discourse against businessmen in the midst of the election campaign.
Before providing the next batch of recovery funds (4 billion euros), the European Commission demanded that the government take measures to make credible the viability of a pension system that, for the last two legislatures, has not been sustained by workers’ social security contributions. The State has to cover a contributory deficit that continues to grow year after year with other budget items: 25,470 million euros recognised in the General State Budget for 2023.
The government has delayed negotiations with Brussels until it missed all the deadlines set to present its measures to control this deficit, the last one last December, and with the aggravating factor of increasing it even more with its decision to raise the amount of pensions by 8.5 per cent. Sánchez has secured an agreement that avoids immediate cuts in benefits and which he can present as a European endorsement of his social policy with less than three months to go before the municipal and regional elections.
Although the details of what has been agreed with the Commission are not yet known except through partial leaks to the press, the two sectors of the government, socialists and Podemos populists, agree in celebrating as a great success not having to enter into the expenditure chapter in order to balance the pension system.
The trade unions are also satisfied to see that, as they demanded of the government, the period for calculating pensions will not even have to be extended. The Minister of Social Security, José Luis Escrivá, began by proposing that the last 35 years of contributions be counted instead of the current 25, then dropped to 30 due to the rejection of the trade unionists, and in the end it will remain a mixed and à la carte system: to choose the current 25 or 29, saving the two that are of least interest to the future pensioner.
The frontal opposition to the “non-reform” of the system comes from large, small and medium-sized employers, plus the self-employed, who will face a general increase in contributions and special surcharges on the highest salaries.
The government is seeking sustainability by increasing Social Security revenues, even if it means making it more expensive to hire employees in the European country with the highest unemployment and with a third of young people out of work.
Sánchez had already become the first Spanish prime minister to single out companies, and businessmen by name, as enemies of his “progressive” cabinet, conspirators or outright unpatriotic. It was a common practice among his Podemos partners, formerly led by Pablo Iglesias and now with Irene Montero and Ione Belarra, which the chief executive now incorporates into his most populist speeches.
At his first meeting after announcing the agreement with Brussels, Sánchez took the opportunity to once again attack the business community, and he did so in the same vein as he had done the previous week against Ferrovial for moving its headquarters to the Netherlands.
The socialist leader was also quick to report his understanding with the European Commission on the matter because it was a milestone of unity amid clashes with the communist sector of the government over laws such as the “yes is yes” law.
After the fight in public, in Congress and in the feminist demonstrations of 8M, Sánchez needs to shore up a team with which he has to get to the next elections with the appearance that they are united by something more than the interest or the need to remain in office for as long as possible.
