Spain inches ahead with pension reform
Spain will pay workers to postpone retirement as part of a pensions reform strategy that analysts warn does not go far enough to cut a huge deficit in the system.
With nearly 30 billion euros ($36 billion) of annual losses in 2020 and rising, Spain’s social security budget is one of the biggest contributors to the country’s ballooning public deficit.
The European Commission has long demanded that Spain reform its pension system and has made it a condition for accessing European Union economic recovery funds.
Under a planned reform unveiled earlier this month that aims to get more people to work longer, Spain will give cheques worth up to 12,000 euros ($14,000) per year to retirement-age workers who postpone their retirement.
Retiring early on the other hand would lead to a reduction in monthly payments.
But the reform, which must still be approved by Spain’s fragmented parliament, will also restore the indexation of pensions to inflation.
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