Spain is considering freezing pensions and speeding up a planned rise in the retirement age as it races to cut spending and meet conditions of an expected international sovereign aid package, sources with knowledge of the matter said.
The measures would save at least 4 billion euros a year as well as fulfil recommendations in a European Union document released in May which senior euro zone sources said was being used as a blueprint for the terms of a sovereign aid program.
The acceleration of the raising of retirement age to 67 from 65, currently scheduled to take place over 15 years, is a done deal, the sources said. The elimination of an inflation-linked annual pension hike is still being considered.
Spain, the new epicenter of the euro zone debt crisis after Greece, Ireland and Portugal, is hesitating to apply for external aid to handle a high public deficit and soaring debt. Its borrowing costs fell on Thursday at an auction of a 10-year benchmark bond but relief may be short-lived.
The new pensions steps, which could be announced as soon as next week along with the 2013 budget, would send a strong signal to investors that Spain is serious about implementing structural reforms it has delayed because of the political cost.
Spanish Prime Minister Mariano Rajoy, who was forced earlier this year to break campaign pledges such as not raising taxes, repeatedly said he would not touch pensions, but he has few options left to trim the budget after drastic cost cuts.
Read more: http://www.reuters.com/article/2012/09/21/us-spain-pensions-idUSBRE88K08320120921
No comments:
Post a Comment