Spain’s government has agreed with unions to increase social security contributions by 0.6% between 2023 and 2032 to help pay for the pensions of an upcoming wave of retirees, the Social Security Ministry said on Monday.
Spain experienced a baby boom during the last two decades of the Francisco Franco dictatorship that ended in 1975, and people born during that time are expected to retire soon, putting state finances under increasing pressure.
The scale of the increase, which will affect employees of all ages and income levels, has been a stumbling block in the three-way talks between government, unions and companies that have been going on for several weeks.
Earlier Monday, business associations representing businesses large and small left a negotiating table, arguing that the plan imposed too much burden on employers and would hurt job creation.
Employers will contribute an additional 0.5% and workers the remaining 0.1%, the unions said.
The approval of the pension reform was one of the conditions that the Spanish government agreed with the European Commission to ensure the release of billions of euros in recovery funds.
Reference-www.eleconomista.com.mx