Finance Minister Fernando Medina today defended a reflection on how pensions are calculated, but rejected that it should be done “immediately, quickly” so that this change would be implemented “with due care”.
“We are really in an exceptional situation and that’s why it’s a reflection to make, [mas] it is not a reflection that will be immediately and quickly made to be considered and discussed with all its weight,” said Fernando Medina, speaking before arriving at the informal meeting of eurozone finance ministers in the Czech city of Prague.
For the official “it is necessary to have a debate about the structural situation”, but not for the time being.
“We have announced extraordinary support for retirees in the amount of half pension they will receive in October, we have also announced the increases for the year 2023, the largest increases in at least 15 years, as there is a formula for calculating of pensions. , and these are the two decisions announced by the government, it has not announced any more decisions,” recalls Fernando Medina.
Recalling that he followed the social security reform at the time, in 2000 the Minister of Finance emphasized the “context that existed at the time, […] economic context of growth and inflation that is very different from the one we are experiencing now”.
“We lived for many years in a context of low inflation and also low growth and the formula was designed for those moments and in recent years the formula has not been fulfilled in practice because it predicted too low increases or even deflation,” he explained to Fernando medina.
Now, “we are in an absolutely exceptional year, with high inflation, and I think everyone understands that during an exceptional year, with absolutely exceptional circumstances, we cannot […] reduce the preconditions for the sustainability of social security and public finances,” he added.
Fernando Medina also recalled the now-announced “extraordinary support for retirees, which is very important for the lives of millions of people”, which “fully completes what was foreseen if it were the result of the strict application of the formula in 2023” .
On Monday, the cabinet presented a package of measures to support incomes due to rising inflation.
The package of measures approved by the Executive includes the payment, in October, of an additional amount equal to half the pension and will reach 2.7 million retirees, to which will be added an update, to be applied in early 2023, which will fluctuate between 4 .43% and 3.53% depending on the value of the pension.
Source: DN
