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Spanish government, unions near accord on pensions

Spanish government, unions near accord on pensions

The Spanish government said Thursday it is on the point of reaching a deal with unions on pension reforms including raising the retirement age, a deal that could avert a general strike that threatens to hamper efforts to ease the debt crisis.
A spokesman for Prime Minister Jose Luis Rodriguez Zapatero's office told The Associated Press negotiators were very close to sealing the agreement. He described it as solid and balanced. The official spoke on condition of anonymity in keeping with government policy.
Earlier the Labor Ministry said a preliminary agreement had been reached overnight but declined to give details.
Leading daily El Pais and other media outlets said the agreement included the government's highly contested plan to raise the retirement age gradually from 65 to 67 under certain conditions.
The government has pledged to approve a pension reform bill Friday. The bill is seen as crucial to its attempts to shore up public finances and make structural reforms as it struggles to emerge from recession.
Unions have long opposed any changes in the retirement age and had threatened a general strike.
Spain is battling to reduce a euro-zone high near 20 percent unemployment and a swollen deficit. The country has also come under fierce pressure from bond investors in recent months over fears it may be unable to handle its debt and will need a bailout like Ireland and Greece.
El Pais said the two main unions have agreed to accept the age change but demand that people who have worked for 38.5 years can retire at 65 with full benefits. The government had insisted on people working 41 years if they wanted to receive full pension at 65. Under current law, you have to pay into the system for 35 years to get retire at 65 with a full pension.
Workers who do not fulfill the requirements for a full pension at 65 will have to work at least 37 years and retire at 67 if they wish to receive full benefits.
Under the deal, the amount received will be calculated from a person's wages in the last 25 years of their working life, up from the current 15.
The negotiations have been going on for several weeks.
Unions called a general strike Sept. 29 to protest the government's austerity measures and labor reforms. The stoppage was partially successful, affecting mostly industry and transport but not services.
Separately, Barcelona-based La Caixa, one of Europe's leading savings banks said Thursday it was studying whether to convert itself into a full-blown listed bank by transferring its banking operations to its listed industrial holding group Criteria.
The conversion would lead to greater transparency for La Caixa and would be the biggest development since Spain set about trying to reorganize its savings banks, or cajas, last year.
Although La Caixa is not believed to have any serious problems, the cajas in general were badly exposed following the collapse of its real estate market and have long been the seen as the weakest link in its financial system.
The government this week announced plans to oblige savings banks to meet a core capital ratio of between 9 and 10 percent, compared to a new ratio of 8 percent for ordinary banks. The current ratio requirement for banks and cajas is 6 percent.
The Caixa has a core capital ratio of 8.6 percent.
Savings banks which do not meet the new requirement by September will be partially nationalized.
The government estimates the ailing saving banks will need euro20 billion ($27 billion) in new capital but many analysts believe this is too low and will not quell fears of the need for am Irish-style bailout.


Updated : 2021-05-17 22:22 GMT+08:00