Spain has announced austerity measures to suck 50 billion euros out of state spending over 3 years, including a proposal to raise the retirement age from 65 to 67.
It is part of plans to claw back the deficit to an EU rules-respecting 3 percent of GDP by 2013.
It is not going to be popular but Spain’s deputy prime minister admits without it the government’s hands will be tied;
“In order to keep the current social security system, we need to start thinking of some measures right away as well as over the next fifteen years,” said Maria Teresa Fernandez de la Vega.
Spain, like many other ageing developed nations is feeling a pensions pinch. Bosses have called for a retirement age of 70. Unions have declared they are totally opposed to any rises and will fight them head on.
The Jobs minister Celestino Corbach warned today the system would run out of money in 2023 if nothing is done.
With unemployment now standing at close to 20 percent 4.3 million Spaniards are out of work, draining tax revenues, and with several sectors including construction still stalled, that number continues to rise.