There is a powerful sector of opinion in Spain that has decided to make public pensions the first and main problem of the economy. The pensions. No, for example, how will the increase in Defense spending be faced, which if the 5% objective is reached would imply adding an additional 60,000 million annually to that item, more than the deficit of the pension system, contributory and non-contributory. Pensions, the big problem. Although it is one of the bases of the social calm that is still felt in Spain; although we don't know for how long.
There are politicians who seem to have bought that speech. It could be sensed in the statements of the PP spokesperson in Congress, Ester Muñoz: “The pension system is going to fail” (a cheap version of going bankrupt). What does “the system will fail” mean? That there will come a day, the end of the month, and the pensioners will not see their pay paid? It would be the apocalypse. The State is the ultimate guarantor of the public pension system. If they are not paid it is because the State itself, the Public Treasury, is bankrupt, without funds. Does Muñoz believe this is the situation? Ultimately, the guarantee of pensions is the totality of the State's income, its ability to collect taxes and incur debt.
These words from the mouth of a PP leader are surprising. It is already known that Vox wants to dynamite the welfare state, fueled by a social revenge reminiscent of that of a hundred years ago.
These days it could be time to remember that Felipe González won an election against José María Aznar that a priori he had lost thanks to the pension issue. It was in 1993. In the second face-to-face debate of the campaign, González brought up the issue to denounce that the popular party had a hidden plan to cut them; Aznar did not know what to answer. He was left lying on the canvas. The defeat was so bitter that the popular party even threatened to denounce an electoral coup.
The paradox of the episode lay in the fact that it had been the González Government that had undertaken the first major pension reform, in 1985, a surgery that involved significant cuts (it tightened the access conditions and reduced the amount of pensions). And as a consequence, it triggered the call for the first general strike of democracy, the result of which was very uneven – more in industry, less in services – as CC.OO had called it. alone, without UGT.
To put the matter in context, the reform was applied in economic circumstances very different from the current ones, the years of industrial reconversion and with unemployment above 20%. As can be seen, the talk of the unsustainability of the public pension system goes back a long way. In Spain the noisemaker has lasted for more than 60 years. It is a model that in the developed world has been around for more than 100 years. In Germany, pioneer, 150.
How could Felipe execute that pirouette in 1993 and dislodge Aznar? Despite the reductions they had applied to pensions, the first socialist governments of democracy had outlined and consolidated the welfare state (universalization of public health, compulsory education and large investment programs in infrastructure, among others). He had that credibility in his favor and presented Aznar as the gravedigger of the model, first of all of the pensions.
It is this past that largely explains the relative electoral strength of the PSOE, which, even in its moments of greatest weakness, maintains sustained support from sectors of workers and modest middle classes. An exception among European social democracy. In the case of pensioners and retirees, according to data from the CIS Barometer from this month, more than 50% who express their intention to vote say they will do so for or sympathize with the PSOE. In the case of the PP, it remains at 21%. The memory is very recent, and also, very important, the consequences and wounds of the austerity policy of the last PP Government, that of Mariano Rajoy. That is why the popular speech about pensions is so suspicious. Although in honor of the truth, it should be remembered that it was the socialist José Luis Rodríguez Zapatero who opened the ban on biting pensions (freezing and postponing the retirement age) when the crisis arrived. Then, Rajoy finished off, stopping them and limiting their increase, which in practice significantly eroded their purchasing power.
Despite the environmental noise, the public debt is now at the same level as the Rajoy Government left it, a little more than 100% of the Gross Domestic Product (GDP), what the economy produces in a full year. There is no reason for joy in this, but there is in the fact that its trend is downward.
Certainly, the weight of pensions in public spending has increased, but even this must be analyzed carefully. In some media it has been highlighted that since Pedro Sánchez has governed, the pension payroll has grown by 60%, but the effect of inflation must be taken into account, of around 27% accumulated and the GDP at 40%. And this increase also has another effect that is not often mentioned and that is that these are gross amounts: around 22,000 million euros of personal income tax are withheld annually from pensions, above one point of GDP recovered by the State through the Tax Agency. And like the rest of the citizens, without deflating the rate.
There is interest in promoting the narrative that pensions are in danger. A fear that can irritate more than any other.
A different thing is whether maintaining the current path of pensions is compatible with the increase or increase in other expenses. Like those already mentioned in Defense. And those that require repairing the battered welfare state. In the campaign, the parties must explain how they hope to balance the accounts if they want to maintain the purchasing power of pensions, reduce debt, and lower taxes. We are all ears.
