The President of the Economic and Social Council (CES), Anton Costas, does not believe that wage increases are currently a risk to inflation and has asked to respect the consensus reached in the Toledo Pact and to increase pensions reflected in the pension reform. CPI. In other words, the professor of economic policy and the current president of the government’s advisory body on socio-economic and labor issues do not share the recommendation to include retirees in a possible “income agreement”, as suggested by the Bank of Spain and some groups. Opposition.
“Given the data we have today, I do not see much fear that wage increases could lead to a price spiral,” Anton Costas told a press conference at the Europa Agency Press. The CES President traveled to Parliament to present the Council’s “Annual Report 2021” to the Speaker of the House of Commons, Marixel Batet.
The CES president noted how they could not be reimbursed for both the 2021 and the 2022 agreed wage increase. In other words, workers accumulate a loss of purchasing power against the backdrop of wages, which is significantly behind the rise in prices. Bank customer data shows that households are reducing spending in the context of rising inflation.
Until May, the difference between the agreed wage and the registered inflation is “six negative points”, the professor recalls. “At the moment, I do not see the persistence of an inflationary spiral in Spain due to the wage reaction,” Costas said.
With regard to inflation, he noted that the main result of the Ukraine war is an increase in energy prices, for which he defended a gas limit that has not yet been used and which is awaiting final approval by the European Commission.
Against the criteria of the Bank of Spain
Anton Costas demanded that there be “fair rules for the distribution of costs incurred as a result of the crisis.” The agreement on possible income, which includes retirees, limits the annual increase in pensions due to high inflation, the president of CES distanced himself from the opinion of the Bank of Spain.
The professor sought to maintain the political consensus reached in the Toledo Pact, which recommended the reassessment of pensions according to the CPI and which was later strengthened by social agreements with trade unions and employers.
“I do not consider pensions as one of the main tools for controlling inflation,” he argued. Costas recalled that “the average pension is 1,034 euros and the below-average pension is a lot.”
In this regard, the President of CES demanded to distinguish between inflation and the sustainability of the public pension system, an issue for which he does not see any risk. “Neither in terms of sustainability nor in terms of sufficiency, these are two big criteria that a fair and equitable system must meet,” he told Europa Press.
Fuel discount “not fair”
“When there are rules for the fair distribution of the costs of the crisis and well-designed economic and social policies, a kind of virtuous circle is formed,” Costas said, citing the fact that he has not achieved a full economic recovery. Spain was able to reduce its deficit and debt, achieving record revenues in the treasury and social security.
The CES president demanded that support measures “should be selective” and aimed at lower-income families and companies that are more dependent on energy. In this regard, he questioned the feasibility of maintaining a 20-cent discount on fuel prices, as he believes the measure will help people with more resources.
“This is not a fair measure, and it is probably not effective to reduce the consumption of goods such as gasoline, which we must reduce and pay a little more,” he said.
Source: El Diario