Saturday, February 24

Escrivá acknowledges “some discrepancy” with Brussels over its equity mechanism

The Minister of Social Security, José Luis Escrivá. / FILE, ARCHIVE

The minister is in favor of fiscal centralization to avoid the “nonsense” of competition between communities and suggests his preference to impose a tax on extraordinary profits and not on billing

Lucia Palacios

The first leg of the pension reform that the Government approved a few months ago generates “some doubts” for the European Commission, which is the one who has to evaluate its effectiveness in order to release a part of the European funds conditioned on compliance. This was recognized this Tuesday by the Minister of Social Security, José Luis Escrivá, during an interview on Onda Cero.

The minister wanted to play down the “discrepancies” that he maintains with Brussels regarding the sustainability of pensions, arguing that of all the milestones they have to meet and most of which have already been set in motion, the European Commission is only suspicious of one: of the new intergenerational equity mechanism (MEI) that replaces the sustainability factor (SF) approved by the PP in the reform of 13.

«We have some technical discrepancy with the Commission on how the MEI is designed. It is the only point in which, at a technical level, the Commission has stated that it would like to continue evaluating”, Escrivá pointed out. The “technical discussion” that they maintain is about the effects in terms of cost containment that this tool can generate, which supposes a rise in the contributions of workers of 0.6 points for the next ten years, as he explained.

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The Spanish Executive has promised to replace the sustainability factor that cut the new pensions of retirees based on life expectancy with another that has an “equivalent effect”, and this is what Brussels does not see clearly: the economic impact of the MEI. The minister hides behind the fact that in 2032 they have to re-evaluate whether the savings have been sufficient to neutralize the FS or not, but he acknowledges that the Commission is not convinced by his semi-automatic rule and is committed to a pure automatic one. In any case, the minister pointed out that there are still months left (until the end of the year) and he trusts that they will come to an agreement.

This debate arises precisely when the ‘men in black’ from Brussels are now in Madrid to issue their opinion on the measures for the first quarter: employment pension plans and the new contribution model for the self-employed. Yesterday they met with officials from the Ministry, although Escrivá has no doubts that with these two milestones “we have largely met.

Against mortgage caps

On the other hand, the Minister of Social Security spoke out against the fiscal policy of the PP after the Andalusian president abolished the patronage tax, following the example of Madrid. Escrivá described this measure as “totally regressive” and openly declared himself in favor of “fiscal centralization” as well as setting an Australian-style model, which assigns each community based on actual spending. “It seems absurd to me that the communities are dedicated to competing fiscally with each other,” stressed the minister, who was also opposed to the mortgage caps. “This cannot be done, because the effects of monetary policy would be neutralized,” he said.

Along these same lines, he hinted at his preference to impose a tax on the extraordinary profits of the electricity companies that the European Commission defends and not on the total billing as the Spanish Executive intends to do. “The Von der Layen rate I imagine that there will be a huge analysis by the Commission services and if they have opted for this option, I understand that it is because it is the one that best fits,” he concluded.

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