The Congress of Deputies has validated by a large majority the decree law of the pension reform with the support of the Government, ERC, PNV, PDECat, Más País and Compromís. The final result has been Ha 179 votes in favor, 104 against and 61 abstentions. It will be processed as a bill, which opens the possibility of introducing changes during the process. The PP and Ciudadanos have voted against the decree and Vox has abstained.
In his defense of the reform, the Minister of Inclusion and Social Security, José Luis Escrivá, said that it makes it possible to address the demographic challenge through “a set of balanced measures” that will guarantee the adequacy of the system. “This reform is an absolute change of paradigm, not only in Spain, but also in Europe. It does not introduce cuts in spending, but an increase in income,” added the minister.
For its part, the PP has finally ratified its opposition to the reform, considering that it will harm both SMEs and workers, who will have to contribute more to have the same pension or even less.
It is the reform to face the financial tensions that will produce the massive arrival of the “baby boomers” in the 2030s and 2040s. A solution that has the endorsement of Brussels, the agreement of the unions and the opposition of employers, and which basically acts on the income side to ensure the stability of the pension system.
Expenses increase by increasing minimum pensions and taking measures to reduce the gender gap, and are offset by an increase in contributions that is carried out in three ways: the uncapping of the maximum bases, the increase in the Intergenerational Equity Mechanism (MEI) which will rise to 1.2%, and the solidarity quota that will be levied on the highest incomes.
At the same time, the controversy over the extension of the computation period with a double track has been overcome, to avoid harm, which was considered politically explosive. The current system (25 years) is maintained for 20 years, with a new one (29 years discarding the two worst years), so that no one will be harmed. Thus support was added, although with the result of increased spending that will have to be compensated with more contributions.
To add parliamentary support, Escrivá has agreed to modifications with the different political forces. With ERC, she accepted that women who reduce their working hours to care for a child contribute 100% of their previous working hours; with Bildu the commitment to progressively increase widow’s pensions until they are equal to contributory ones in four years; and PDECat has been assured that the solidarity quota will be progressive.
