The Government of Spain proposes to raise prices even more, from 0.5% to 0.6%

The Government of Spain has raised its proposal to raise social contributions from 0.5% to 0.6% for ten years, according to the new text that the Minister of Inclusion, Social Security and Migrations, José Luis Escrivá has brought this Monday to the dialogue table on the reform of the pension system, as reported by union sources after the meeting.

Of this 0.6% increase, 0.4% will correspond to the company and the remaining amount, 0.2%, to the worker, as explained by the General Union of Workers (UGT).

Both the UGT and the Workers’ Commissions (CC.OO.) value in a “positive” way the changes in the Government’s position regarding the definition of the Intergenerational Equity Mechanism (MEI) through an improvement in income, to replace the Sustainability Factor of the current pension system.

Both unions hope that the Executive will improve its proposal “in terms of sufficiency”, without this predetermining future negotiations within the social dialogue, if necessary.

UGT and CCOO have announced that they will continue working on this matter in the coming days.

Last week, the proposal to raise prices caused discomfort within the Spanish Confederation of Business Organizations (CEOE), since it represents a new increase in company costs, after the announced increase in the minimum rate of Corporation Tax collected in the 2022 budget project and the increase in the minimum interprofessional wage (SMI), among other measures adopted by the Government that entail higher business spending.

However, the rise in contributions for the MEI would begin to take effect from 2023, for a period of ten years to fatten the Reserve Fund for pensions, which currently has just over 2.1 billion euros.