Despite the doom and gloom that we’ve been fed about Spain and the state of the Spanish economy, it seems that the Spanish government has failed to get its people on board about the austerity measures, employment and pension reforms it has deemed necessary to battle its deficit.
Cuts to public servants’ salaries were forced through the Spanish parliament by a meagre single vote earlier this year, leaving many feeling poorer already. Can the Spanish public bear any changes to their labour or pension laws?
With sky high unemployment (at 20%), few would argue that there is a need to make it easier for Spanish employers to hire and fire workers. Spanish politicians feel the need to shed the country’s image of cosseting workers and open itself up to foreign investment. But who would open a factory in a country where the employee, rather than the customer (or shareholder) is always right?
Prime Minister Zapatero tried in February to increase the state retirement age to 67 from 65, but the proposals were met with scenes of outrage on the streets and in negotiating rooms with union leaders.
When you think about a Spanish retirement, the image that springs to mind might involve a calm, tanned older people sitting by the sea, drinking wine and eating food cooked in life-preserving olive oil. That is certainly what attracts thousands of Brits per year to retire there!
But increasing life expectancy all over Europe means that pensions are going to cost more.
According to the Spanish statistics agency the INE, there were 6 people of working age to every pensioner in the 1970s. Spanish economists now estimate that if life expectancy continues to rise at its current rate and birth rates continue along their current trajectory, by the 2050s there will be only 1.5 people working to support every person of pensionable age.
When you put those figures into perspective, it seems that the Spanish government has little choice. Currently a minority government, the Spanish socialists may have to force their pension reforms through the parliament and risk unpopularity.
