Alejandro López
Last Thursday, Spain’s Socialist Party (PSOE)-Podemos government passed its pension cut through the Spanish Congress. The cuts were agreed in talks between the European Union (EU) and Spain’s main trade unions, the Podemos-linked Workers Commissions (CCOO) and the PSOE-aligned General Workers Union (UGT).
This occurs as a wave of mass strikes against austerity and inflation explodes over Europe, in France, Germany, Britain, Portugal, Greece, Belgium, the Netherlands and beyond. Across the Pyrenees, millions of workers in France are protesting against Macron’s pension cuts, which he is trying to impose in the face of overwhelming popular opposition. Moreover, the French ally of Podemos, Unsubmissive France (LFI) party leader Jean-Luc Mélenchon, is issuing unserious proposals to the French union bureaucracy that it should think about a general strike against Macron.
The actions of Podemos makes clear that, as in France, there is no “democratic” mechanism within the existing capitalist state for workers to make their opposition to austerity felt. Podemos is backing a cut demanded by the EU so that Spanish banks and corporations can obtain a fourth €10 billion payment from the EU pandemic bailout fund. The record of Podemos, a pseudo-left party of the affluent middle class, shows that workers in Europe cannot oppose austerity by voting into capitalist government the parties falsely marketed by the capitalist media as the “left.”
In Spain, as in France and across Europe, the way forward is to build a mass movement in the rank-and-file, independent of the union bureaucracies, and opposed to the entire political establishment, including pseudo-left parties like Podemos.
Spanish officials are boasting that other EU countries are preparing similar attacks and will model themselves on its cuts. Last week, José Luis Escrivá, minister of Inclusion and Social Security, said he is receiving calls to set up meetings from his European counterparts, including in Germany, Belgium and Romania. “I am convinced that it will be an international reference on how these reforms should be addressed in the future,” he said at a press conference.
The reform deepens the PSOE’s deep pension cuts in 2011, which increased the age of retirement by two years, from 65 to 67. The new reform will mean:
Pensions will be calculated using the last 29 years of working life, instead of the current 25. This will mean a substantial cut to future pension levels, as workers tend to earn more at the end of their working lives. In any case, due to prior reforms, in order to collect the entire regulatory base of a pension, workers will have to work a minimum of 37 years from 2027 onwards. If you retire at 64 having contributed over 35 years, your pension will be cut by 21 percent.
Higher salaries will contribute more to the social security system. This will be 1 percent in 2025 and will increase at a rate of 0.25 percentage points per year until it reaches 6 percent in 2045. While the PSOE-Podemos is presenting this as a tax on the rich, the truth is that it is being applied only to wage income, not to income from capital gains—which constitute the overwhelming majority of the income of the parasitical super-rich.
In the event of “eventual excesses” of pension expenditure, the body in charge of auditing the new system, the Independent Authority for Fiscal Responsibility (AIReF), will 'identify a broad set of measures to eliminate excess net spending on pensions.' If this happens, the government will open negotiations with the trade unions and big business to 'correct, in a balanced way, the excess spending on pensions.' The law indicates that this can be achieved through 'an increase in contributions' or with 'another alternative formula to increase income or reduce spending.'
Workers will not only retire later; those who do manage to retire will receive a poverty pension. Currently, 64 percent of pensioners earn less than the minimum living wage. The largest group, 1,097,000 pensioners, receives between €700 and 750 monthly.
This latest pension cut comes a year after the PSOE-Podemos government passed a reactionary anti-worker labour law, designed by the union bureaucracies and the Podemos-led ministry of labour.
The pension and labour attacks worked out between the PSOE-Podemos government and the EU exposes the political lies told by then-Podemos leader and deputy prime minister, Pablo Iglesias. He endorsed the €750 billion EU pandemic bailout in July 2020, claiming that “this time we will not have austerity, but an ambitious plan of fiscal stimuli.”
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