Escrivá admits that the new tool that replaces the sustainability factor generates “doubts” and tries to convince the EC of its effectiveness, although it will not change it
The Intergenerational Equality Mechanism (MEI) approved a few months ago to replace the deprecated sustainability factor (SF) is on the ropes and hasn’t even come into effect yet. The European Commission is suspicious of its effectiveness and is demanding changes to its design, doubting whether the economic impact it will generate is equal to that of the sustainability factor created by the director Mariano Rajoy. This was acknowledged on Tuesday by the Minister of Social Security, José Luis Escrivá, during an interview on Onda Cero.
“We have some technical discrepancy with the Commission on how the MEI is designed. This is the only point where the Commission has indicated at a technical level that it wants to continue the evaluation,” said Escrivá, who, however, leaves the door open to make changes if necessary to get the approval of Brussels, as some of the European funds is at stake.
The “technical discussion” they are having has – according to the minister himself admitted – to do with the kind of rule it is and the effects it has on the system, as the pact the EC made with the socialist government to repeal it from the FS is that it was similar. This means that the new mechanism, which assumes a 0.6 point increase in employee contributions over the next ten years, should bring in about six-tenths of GDP, which would moderate spending by the sustainability factor, which linked the pensions of new retirees with the average life expectancy, which Escrivá estimates could mean a 20% reduction for the youngest. “It was extremely damaging,” he emphasized.
The minister is confident that the savings generated by this extra collection for a decade will be equivalent, but he is hiding behind the fact that they will have to re-evaluate in 2032. If that money stored in the pension reserve fund is enough to neutralize the sustainability factor and alleviate the tension that may exist in the system for decades to come, nothing more should be done. However, if this is insufficient, the On-duty Director will have to take additional measures, as laid down in the measure. And this is what does not convince the European Commission, which demands a purely automatic rule, similar to the FS, and not semi-automatic.
“The Commission is telling us that it should be replaced by another rule that is also automatic,” said the former Airef president, who believes the MEI is “more reliable” and “can work”. In any case, the minister pointed out that they are trying to convince Brussels of the benefits of the new rule and is confident that they will come to an agreement in these little more than three months remaining until the end of the year, when the Commission decides whether or not it endorses this measure.
These doubts from Brussels are added to those of the trade unions, which, despite agreeing with Escrivá less than a year ago on this adjustment tool, are now demanding that this six-tenths price increase that will take effect in January be extended for longer. and does not end in 2032.
This debate arises precisely when the men in black from Brussels are in Madrid today to evaluate the different elements of component 30 for the recovery plan. In concrete terms, they must give their opinion on the measures for the first quarter: occupational pension schemes and the new premium model for the self-employed. Escrivá has no doubts that the commitment has been “broadly fulfilled” and they will approve a new disbursement of European funds.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
