The European Commission has landed in Spain to assess the milestones of the Recovery Plan and, specifically, those of the structural reform of the pension system. The main “technical discrepancy”, according to Minister José Luis Escrivá himself, is the formula of the Intergenerational Equity Mechanism (MEI) that will increase contributions by 0.6% until 2032. Brussels prefers an automatic rule due to the possibility of making projectable calculations in the long term, and Social Security indicates that it will make an effort to convince them of its model, a semi-automatic rule that will be valued again in 2032.
The simile of an automatic rule, whose methodology would be stable over time, is the rule introduced by the PP in the previous reform phase: the Sustainability Factor, a measure postponed and later repealed. A mechanism of this type makes it possible to project long-term forecasts of, in this case, income from social security contributions. At this point, they indicate from the Ministry, the European Commission is supported, which prefers this model to have its long-term projected scenario.
On the other hand, as it is currently formulated, the Equity Mechanism is a semi-automatic rule. Along with the mechanism, a forecast of extra income was prepared due to the increase in prices of some 42,000 million, according to information from November 2021. As of 2032, they defend from the Escrivá portfolio, their behavior will be assessed with the aim of complying the agreed objectives.
The Spanish Social Security defends the flexibility provided by this semi-automatic rule, which allows readjustments to be made in 2032 based on possible changes in the macroeconomic or demographic environment and, at the same time, offers room for maneuver to social agents and the Government of the day. At Monday afternoon’s meeting he simply discussed with Brussels about the new self-employment contribution system and the reform of employment pension plans, and this “technical discrepancy” will be discussed later.
From the Ministry they recognize that they would be willing to make modifications to the norm without losing the philosophy of the Intergenerational Equity Mechanism proposed with the social agents, although the CEOE opted out of the agreement. Their work, they indicate, will go through convincing the technicians of the European Commission of the confidence and solidity of the reform.
“Technical discrepancy”, says Escrivá
Escrivá, in statements to Onda Cero collected by Europa Press, has insisted that this “is the only point” that the Commission wants to continue evaluating, but not because it disagrees with it. “I would not say that he is not convinced, he has some doubts, a technical, intellectual discrepancy,” he added.
“What the Commission tells us is that it should be an automatic mechanism and we have explained that it is better for it to be semi-automatic. It is a purely technical discussion (…) I am convinced that we will agree, we have months left” , said the minister, who does not contemplate any other scenario than reaching an agreement with Brussels on this issue.
Regarding the meeting with officials, Escrivá is favorable to the agreement. “There is nothing material that will keep us from meeting the milestones. The two laws have more than met the milestones”, highlighted the minister, who recalled that “all European countries” are visited by the ‘men in black’ from Commission to assess compliance with its Recovery Plans.
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