The Social Security Ministry said Monday that the government agreed on the agenda for an upcoming wave of retirees - the government agreed to raise social-security contributions by 0.6% between 2023 and 2032 to pay for the pensions of upcoming retirees.
Spain experienced a baby boom during the last two decades of Francisco Franco's dictatorship, which ended in 1975, and children who grew up under that era are expected to retire soon, putting the state's finances under increasing strain.
The three-way talks between government, unions and businesses have been going for several weeks. The scale of the increase is estimated to affect employees at all ages and income levels. This has been a huge obstacle for the government and unions in three weeks.
The CEOE and Cepyme business associations, which represent large and small companies, abandoned the negotiating table earlier on Monday, arguing that the plan burdend employers and did not reshape job creation.
The employer will contribute a generous amount while the rest of the worker's is 0.1%, union said.
The Spanish government agreed to pass the pension reform, while he agreed to the European Commission, to release millions of dollars in recovery funds.