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ECONOMY

Retirees protest across Spain over ‘shameful’ pensions

Thousands of retirees took to the streets in protest across Spain on Thursday, calling on the government to raise pensions and defend the social security system.

Published: 23 February 2018 16:43 CET
Retirees protest across Spain over 'shameful' pensions
Archive photo of a pensioner protesting. Photo: AFP

The pensioners, many with whistles and wearing ribbons with the brown symbol of their cause, marched in the capital Madrid as well as Barcelona, Bilbao, Seville and Granada.

The union-organised rallies called for “dignified” pensions, saying that the conservative government's 0.25 percent increase fails to keep up with inflation, as Spain's consumer prices rose by 1.2 percent last year.

Former waiter Jose Maria Elias, 66, was one of the hundreds of demonstrators gathered outside Spain's lower house of parliament in Madrid on Thursday.

“The 0.25 percent increase is shameful,” Elias told AFP, adding that he receives €950  ($1,170) a month.

“Let all the corrupt people return what they stole and put it in the pension fund,” he said, referring to the numerous corruption scandals of Prime Minister Mariano Rajoy's ruling party.

READ: Seven facts that show the dark reality of Spain's economic recovery 

“They have demolished our public pension system,” said Josefa Albala, 77, who added that she uses her retirement money to feed her unemployed daughter.    

After coming to power in 2011 as the country struggled in the wake of the global financial crisis, Rajoy's government imposed tough austerity measures and was strongly criticised by the opposition for dipping into a €66.8 billion pension reserve fund.

Rajoy has recently encouraged Spaniards to invest in private pension plans, and a Socialist party lawmaker accused him of seeking to “privatise pensions” during a tense Senate session on Tuesday.

However, Rajoy has said that protecting the public pensions system is a top priority and it would become viable thanks to employee contributions as salaries rise with the recovering economy.

Spain has one of the lowest birth rates in Europe and there are concerns the burden on its pension system will increase in the future, with 25.6 percent of the population expected to be aged over 64 by 2031.

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ECONOMY

How is Denmark’s economy handling inflation and rate rises?

Denmark's economy is now expected to avoid a recession in the coming years, with fewer people losing their jobs than expected, despite high levels of inflation and rising interest rates, The Danish Economic Council has said in a new report.

Published: 30 May 2023 15:46 CEST
How is Denmark's economy handling inflation and rate rises?

The council, led by four university economics professors commonly referred to as “the wise men” or vismænd in Denmark, gave a much rosier picture of Denmark’s economy in its spring report, published on Tuesday, than it did in its autumn report last year. 

“We, like many others, are surprised by how employment continues to rise despite inflation and higher interest rates,” the chair or ‘chief wise man’,  Carl-Johan Dalgaard, said in a press release.

“A significant drop in energy prices and a very positive development in exports mean that things have gone better than feared, and as it looks now, the slowdown will therefore be more subdued than we estimated in the autumn.”

In the English summary of its report, the council noted that in the autumn, market expectations were that energy prices would remain at a high level, with “a real concern for energy supply shortages in the winter of 2022/23”.

That the slowdown has been more subdued, it continued was largely due to a significant drop in energy prices compared to the levels seen in late summer 2022, and compared to the market expectations for 2023.  

The council now expects Denmark’s GDP growth to slow to 1 percent in 2023 rather than for the economy to shrink by 0.2 percent, as it predicted in the autumn. 

In 2024, it expects the growth rate to remain the same as in 2003, with another year of 1 percent GDP growth. In its autumn report it expected weaker growth of 0.6 percent in 2024.

What is the outlook for employment? 

In the autumn, the expert group estimated that employment in Denmark would decrease by 100,000 people towards the end of the 2023, with employment in 2024  about 1 percent below the estimated structural level. 

Now, instead, it expects employment will fall by just 50,000 people by 2025.

What does the expert group’s outlook mean for interest rates and government spending? 

Denmark’s finance minister Nikolai Wammen came in for some gentle criticism, with the experts judging that “the 2023 Finance Act, which was adopted in May, should have been tighter”.  The current government’s fiscal policy, it concludes “has not contributed to countering domestic inflationary pressures”. 

The experts expect inflation to stay above 2 percent in 2023 and 2024 and not to fall below 2 percent until 2025. 

If the government decides to follow the council’s advice, the budget in 2024 will have to be at least as tight, if not tighter than that of 2023. 

“Fiscal policy in 2024 should not contribute to increasing demand pressure, rather the opposite,” they write. 

The council also questioned the evidence justifying abolishing the Great Prayer Day holiday, which Denmark’s government has claimed will permanently increase the labour supply by 8,500 full time workers. 

“The council assumes that the abolition of Great Prayer Day will have a short-term positive effect on the labour supply, while there is no evidence of a long-term effect.” 

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