Escrivá clashes with Podemos and the CEOE in their pension reform

In the last phase of the pension reform, Minister José Luis Escrivá has all his interlocutors worried and some clearly against it.

Thomas Osborne
Thomas Osborne
25 November 2022 Friday 21:40
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Escrivá clashes with Podemos and the CEOE in their pension reform

In the last phase of the pension reform, Minister José Luis Escrivá has all his interlocutors worried and some clearly against it. Everyone is worried because the days go by and the deadline is running out, the reform has to be closed at the end of the year, with no concrete proposals or meetings in sight. The latter has changed, and finally, the Ministry of Inclusion and Social Security has summoned the social agents on Monday to, supposedly, give their global proposal on the pending issues.

"We don't have a role," the re-elected president of the CEOE, Antonio Garamendi, complained this week. “It is an unorthodox negotiation”, add other protagonists. These are laments that are also made by the other social partners. It is the result of the new negotiating tactic that Escrivá has imposed in this round where, unlike the previous ones, it reduces meetings to a minimum and multiplies informal and bilateral contacts. The minister is seen convinced with the method, but not the others.

If at this point your interlocutors are impatient, some of them also show frontal opposition to your proposals. Specifically, Podemos flatly rejects extending the computation period to calculate pensions, no matter how many corrective elements are included, while the employers oppose the uncapping of the highest pension contributions.

Between the two government partners, the point that complicates the agreement is the extension of the calculation period. "Politically it is very delicate," they say from Podemos. "Although it is allowed to choose the best years, even if it is fiscally neutral, there are groups that can benefit and others harmed," these sources add. From the minority partner of the coalition they recognize that, as Escrivá argues, the most irregular labor careers can win with this modification. However, they believe it poses a potentially explosive situation.

They also point out that if what is sought is to increase Social Security income, efforts should be concentrated on this point and the calculation should not be touched.

What the Ministry of Inclusion proposes is to slightly extend the current calculation period of 25 years with corrective elements, such as the option of choosing the best years of the degree. It is an initiative designed to adapt the calculation of time to the current era, when nothing is guaranteed anymore, such as that the last years of the degree are the best.

"The idea is to ensure that if a 40-year-old person is offered both systems, they choose the one we present," say Ministry sources.

In another of the aspects of the pension reform, the so-called uncapping of the maximum contributions, the opposition comes largely from employers, who also complain of being ignored by the Ministry. "Today, we have only seen price rises and without consulting," Garamendi complained.

Sources from the Ministry concede that it is very difficult for them to have the support of the CEOE in this reform, especially when they already started on the wrong foot. The Government included in the budgets an 8.5% increase in the maximum contribution base without addressing the issue with the social agents, which provoked the wrath of the employer. A month has passed, but there is no approach.

The employers see another increase in contributions in the pension cutoff and are radically opposed. What Escrivá proposes is to progressively raise the maximum contribution base, currently located at 4,139 euros per month, so that what exceeds this amount does not contribute. The counterpart is that, when the contribution rises, the pension will also rise. All in a gradual process of about 30 years, according to the proposals with which the Ministry has been working for more than a year.