Garamendi denounces that the pension reform is a tax on talent
The president of CEOE, Antonio Garamendi, argued this Tuesday that the second part of the pension reform involves a “tax on talent” that will reduce the competitiveness of Spanish companies at the international level. The business representative has stressed that the Spanish business fabric is made up of thousands of small and medium-sized companies that have managed to advance in their outsourcing process, something that sustained the growth of the Gross Domestic Product (GDP) in 2022. Garamendi has criticized that the Ministry of Inclusion, Social Security and Migrations has focused all the negotiations to make the pension system sustainable on income, instead of opening itself to incorporating the proposals of employers in terms of taxes or public savings.
In addition, the CEOE leader has denounced that the portfolio of José Luis Escrivá has not shared his economic projections, which has prevented any tripartite agreement. “We do not have the economic memory, we do not have the economic predictions. How are we going to work in this way?” The representative of the businessmen asked himself during his intervention in the forum organized by the employers’ association of the self-employed ATA. Garamendi too has criticized the Government for avoiding social dialogue to develop its pension reform and that instead it has limited itself to calling a handful of meetings in less than a week, once it had already committed the strategy to be followed with Brussels and its government partners.
Garamendi recalled that pensions are an issue that affects all Spaniards, but that revolves around the agreements reached by employers and workers, since active employees are the ones who support the system. “That we have been pushed aside (from the negotiation) is not acceptable. The key to the future of pensions is quality employmentthe companies are going to continue working for our country, to create jobs”, he assured. However, the employers refuse to fall into “complacency” and highlight the problems of the agreement that is expected to be closed throughout this Tuesday the Ministry of Social Security and the trade union centrals, UGT and CCOO.
Pension reform triggers employment costs
The president of the CEOE has indicated that the increase in contributions, which implies an increase in labor costs assumed by companies, is a “tax on employment” and a “huge cut in attracting talent”. Garamendi understands that The pension reform has been approached from “a collection point of view” by the Government, which will reduce the ability to attract the necessary talent for the digitization and transition processes towards sustainability. For the leader of the employers’ association, the increase in the weight of contributions is going to have implications in terms of international competitiveness, since he understands that it is going to translate into a “brutal lack of competitiveness with respect to other neighboring countries.”
However, Garamendi has highlighted the ability to reach agreements with the rest of the social agents and has taken as an example the strategy on Health and Safety at work signed a few weeks ago after almost a year of negotiation. The president of CEOE has highlighted the contributions of the employer in the 15 tables in which he has participated despite not having shaken hands with the Government and the unions. However, has reproached that the Executive wants to introduce changes, but that these are financed by the rest“I invite you to dinner, but you invite”, he ironized, referring to the breakdown of talks for the rise of the SMI.
“When it is said that employment is holding up, it is true and it is good news, but we have the problem of the closure of small businesses and the drop in the affiliation of the self-employed,” he recalled. For this reason, the employers have expressed their “frontal rejection” of the solutions proposed by the Escrivá team, despite not having risen from the table. The business negotiator, Rosa Santos, acknowledged this Monday that that side of the table had “given up” due to the impossibility of signing an agreement. Although, the CEOE has not renounced making contributions until the final text is closed, which will be presented this Wednesday in the Commission for monitoring the Toledo Pact of the Congress of Deputies.
The deal will close in the next few hours.
The Government promised at Monday’s meeting to deliver one last document first thing this Tuesday, once he had assessed the requests of the CCOO and UGT regarding minimum pensions and the gender complement. At least a floor will be established for minimum pensions and a gender supplement that will add 10% of GDP to the annual revaluation in 2024 and 2025, according to the latest paper. At the same time that the employers have convened their federal councils throughout Wednesday morning to give final support to the text before Escrivá goes to Congress, since the appearance is scheduled for the afternoon.
While waiting to know the latest nuances, the result of the conversations has been to double the Intergenerational Equity Mechanism (MEI), which goes from 0.6% to 1.2% and will apply to all types covered by Security Social. In addition, the maximum contributions will rise by 38% until 2040while the maximum pensions will only be 20% until 2065. And a new solidarity quota is established for salaries that exceed the contribution limit that will reach 6% in 2045. Finally, regarding the computation, the current system (25 years) with the possibility of taking into account the last 29 years excluding the two worst to carry out the calculation of the pension, so that Social Security will automatically select the most beneficial mechanism for the retiree.