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Wrong proposal

Demagoguery will not guarantee the sustainability of the pension system

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Wrong proposal

The sustainability of public pension system is one of most serious problems we face. Its solution is not only complex from a technical point of view, but it requires large doses of dialogue, negotiation and agreement between all political and social forces. The proposal to resolve it with a final imposition on banking sector launched yesterday by Pedro Sanchez is not only ineffective, because it will not achieve goal it pursues, but demagogic, as was clear in its justification as a kind of revenge for aid Received after financial crisis. The last thing our pension system needs is populist-inspired solutions.

Previous Editorials

Economic Emergencies (02/01/2018)

Enough of excuses (11/12/2017)

State pension Pact (20/07/2017)

Citizens are looking uneasily at growing deterioration of Social security accounts. The uneasiness is all more so as financial weakening of Social security coexists with favorable evolution of employment, number of affiliations. This is because employment that is being created is of low quality, given dominant temporality in contracts of employment and low average salary of new employees. To this we must add demographic evolution of our country, with a growing ageing that in no way favours necessary increase in relationship between contributors and pensioners. In face of it it is necessary to act already.

Decisions to be taken should operate on different areas, from those intended to improve quality of employment created to elimination of fraud in hiring, without forgetting any extensions in retirement age or elevations in stops of Quote.

But without prejudice to se actions, it is necessary to assume that any imbalance between income and expenditure of Social security will be supported by public budgets. This means admitting that tax collection needs to be increased to meet that inexcusable priority.

What is unreasonable is to define a specific tax that falls on a particular sector of economy. Much less justify it as a counterpart to public aid that banks have received in management of financial crisis.

A different issue is introduction of levies on certain activities, such as those that impair environment or excessive activity of certain financial and speculative transactions, such as rate passed by numerous governments and pending of definitive approval in EU whose origins date back to demonized Tobin levy. The IMF's 2010 proposal for a bank tax was intended to set up a fund to address future solvency crises of se entities, not to cater for pensions.

The necessary increase in tax revenues to ensure Social security commitments does not have to be in final tax. There is enough travel in most of existing tax figures to guarantee income generation. The definition of se means, of choice of tax figures to satisfy objective of sufficiency, should be object of an unpostponable debate among parliamentary representatives.

Political forces should be aware of lost time. The reanimation of Toledo Pact Commission must begin by clarifying commitment to care for current and future pension commitments. That must be starting point, and not populist proclamations of penalty to a certain sector that end up weakening objective pursued and eroding credibility of one who proposes it.

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