Spain to Increase Retirement Age and Freeze Pensions?

By: Ian Campbell | Mon, Sep 24, 2012
Print Email

An article reported Friday that:

Increasing the retirement age by two years and freezing pensions in order to possibly save 4 billion euros a year is a statement that is based on a calculation using assumed inflation rates. Stated differently, I assume the so-called savings really are savings measured against what would be the forward pension costs but for removing inflationary increases to pension costs from the equation.

Under any circumstances, these strike me as 'band-Aid moves' at best. Moreover, if I am right in what freezing means, there is no austerity in that in the context of reducing current costs.

Watch carefully for announcements from and about Spain this week and next, where for me what happens with Spain seems critical to what is likely to happen in the Eurozone generally.

You might also want to read Spain's Fiscal Deficit 8.56% of GDP in First Half; Impossible Second Half Targets.

Topical Reference: Spain targets pensions as bailout likelihood increases, from The Financial Post, from Reuters, Julien Toyer, September 21, 2012 - reading time 3 minutes. Also read Spain's Fiscal Deficit 8.56% of GDP in First Half; Impossible Second Half Targets, from Mish's Global Economic Trend Analysis, Michael Shedlock, September 21, 2012 - reading time 2 minutes.



Ian Campbell

Author: Ian Campbell

Ian R. Campbell, FCA, FCBV
Business Transition Simplified

Through his website and his Business Transition & Valuation Review newsletter Ian R. Campbell shares his perspectives on business transition, business valuation and world economic and financial markets influences on those two topics. A recognized business valuation and transition authority, he founded Toronto based Campbell Valuation Partners Limited (1976). He currently is working to bring his business valuation and transition experience to both business owners and their advisors in our new economic, business and financial markets normal.

Copyright © 2011-2016, Business Transition Simplified, all rights reserved

All Images, XHTML Renderings, and Source Code Copyright ©