If the president fulfills his promise to revalue the CPI, he faces for this year and the next big expenses advised against by Brussels

<img width="3072" height="2048" class="ue-c-article__image" alt="Plenary at the Congress deputies Control of the Government lt; HIT> Pedro lt; / HIT gt; sanchez entering the Hemicycle” src=”https://e00-elmundo.uecdn.es/assets/multimedia/imagenes/2021/06/14/16236980350029.jpg”>
Plenary at the Congress deputies Control of the Government lt; HIT> Pedro lt; / HIT gt; sanchez entering the HemicycleDani DuchWORLD

The government of Pedro Sanchez It will have to face an important political and economic dilemma in the preparation of the Budgets for 2022, if it wants to fulfill its promises to pensioners and employees and the public. Either comply with them, or collide with the European Commission.

The Bank of Spain announced yesterday that it expects an average inflation in 2021 of 1.9%, much higher than the 0.9% that has risen to pensioners and public employees this year. Therefore, if the Bank of Spain is correct and the Government wants to guarantee purchasing power for both, it must increase 1% to both groups with an additional cost of about 1,300 million for pensioners and another 1,400 for public employees.

But there is more. The Minister of Social Security, Jos Luis Escriv, defends based on the CPI of the previous year for the rise of the following year, so that pensions should revalue about 2%! in 2022. And the Minister of Territorial Policy, Miquel Iceta, try the same with public employees. The joint effort may approach the cost of 5,500 million only that year for the public coffers, which, moreover, would remain structurally, despite the fact that, according to the stability plans presented to Brussels, no country has a chronic deficit greater than that of Spain, more than 5% of the Gross Domestic Product over a long period.

Raising pensions and public salaries would logically be expected and appreciated by retirees and civil servants, who claim losses in purchasing power in recent years, but will deepen the hole in the public accounts and generate a conflict with Brussels.

The European Commissioner for Economic Affairs, Paolo Gentiloni, already declared on June 2 to this newspaper that the most indebted countries should not raise public sector salaries or pensions now. According to Gentiloni, it is one thing that the euro deficit control rules have been suspended to increase specific expenses due to the pandemic and another that the countries with the greatest imbalances are thrown into more structural expenditures. In his opinion, with such high debts and deficits, the priority should not be these increases in structural spending, but rather those connected to the proper use of European funds.

Already last year the governor of the Bank of Spain, Pablo Hernndez de Cos, unsuccessfully warned about the risk of increasing these items, especially for civil servants, as long as the strong deficit generated by the pandemic is not wiped out. Community sources consulted bet that the items for pensioners and public employees will be examined with particular emphasis, because they constitute a touchstone to measure the political will of governments to combat the deficit.

Another test for the European Commission will be the reform of the pension system in which, according to Escriv himself, it would be necessary to delay the effective retirement age and other adjustments to save the equivalent of about 30,000 million euros today. However, the Minister of Social Rights and new leader of Podemos, Ione Belarra, ruled last Sunday in the opposite direction by adopting after his election as successor to Pablo Iglesias, on pensions with a program in which we stop delaying the retirement age and advance it, with decent pensions for the elderly who have been working all their lives. Advancing the retirement age would not only violate the lack of specificity in the Recovery Plan presented to Brussels, but would also exacerbate the imbalance in the Social Security system. Many promises of all kinds within the Coalition Government.

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