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Brussels warns that Spain is the EU country where pension spending will increase the most

BRUSSELS, April 19 (EUROPA PRESS) -.

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Brussels warns that Spain is the EU country where pension spending will increase the most

BRUSSELS, April 19 (EUROPA PRESS) -

The European Commission has warned this Friday that Spain is the EU country where a greatest increase in pension spending is expected due to the impact of the system reforms, which according to Brussels will mean an increase in spending of up to 4.6 percentage points. of GDP in the projection period, which covers until 2070.

"In summary, the measures adopted in 2021 and 2023 lead to an increase in public spending on pensions of 3.3 percentage points of GDP in 2050 and 5 percentage points in 2070," says the 2024 Aging Report published this Friday by the community executive.

These reforms refer to the new indexation based on the CPI approved in 2021 and the elimination of the sustainability factor from 2023, which gives way to the new intergenerational equity mechanism.

Furthermore, the second part of this reform, which must guarantee the long-term sustainability of the system and which includes the review of the contribution calculation period, is linked to the fourth payment of more than 10,000 million euros of the recovery plan, still pending approval by the Commission, whose evaluation will arrive on May 20.

Brussels points out that the main drivers of this upward pressure on spending are the new indexation rule based on the CPI and the removal of the sustainability factor. "The new bonus/penalty regime and the corresponding increase in the effective retirement age partially offset this increase, but the rest of the measures adopted slightly increase public spending on pensions," the document indicates.

In relation to the Aging Report published in 2021, Spain has also received the largest upward revision, with 6.5 percentage points more in the forecast of all expenses related to aging in the period 2022-2070.

The Commission also points out that spending will increase considerably during the first part of the forecast period, until 2045, a period in which Spain will also register the largest increase, with almost 4 percentage points of GDP, followed by Lithuania, Slovenia, Portugal, Slovakia , Cyprus and Luxembourg, with an increase of 2.5 to 3 percentage points of GDP.