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Garamendi on the income pact: It is important to talk about pensions

Four months after Pedro Sanchez, President of the Government announced that the Government would promote a great Income Pact, the Executive, represented by eight ministers and commanded by Nadia Calvino, the first vice president, and the social agents return to the table this Wednesday to discuss a controversial and complex topic in the midst a situation of high prices and great economic uncertainty.

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Garamendi on the income pact: It is important to talk about pensions

Four months after Pedro Sanchez, President of the Government announced that the Government would promote a great Income Pact, the Executive, represented by eight ministers and commanded by Nadia Calvino, the first vice president, and the social agents return to the table this Wednesday to discuss a controversial and complex topic in the midst a situation of high prices and great economic uncertainty.

There are very few options for reaching an agreement, especially at this meeting. The businessmen insist on including pensions, civil servants, and wages in this hypothetical pact, which is in line with the Bank of Spain petition. Unions, however, rule out giving up an armored wage rise with the CPI, and warn of a "hot fall" of mobilizations. Both sides agree that Moncloa must move to become the main player in the negotiation. The Government, however, leaves the ball at the other end and encourages employers and unions alike to come to an agreement that is "very important." On Wednesday, the Minister of Economic Affairs stated that they would support and assist it.

Due to the increasing tension between businessmen, the Government, the pact is complicated. Antonio Garamendi (the president of the CEOE) pulled the strings a bit more. He charged Wednesday against the Executive with acting in a permanent electoral key, and specifically against Yolanda Diaz (2nd vice president), making it clear that the sanity they had maintained throughout the pandemic is over.

"Many messages they send, especially those sent by the second vice president yesterday, are pure election key," said the Basque leader. Diaz had accused the employer of "blocking wage increases" and stated that "this was not the time to moderate wages. He also supported a review this year of the Interprofessional Minimum Wage, (SMI), another demand made by the unions on Wednesday. We are not going to send messages in electoral key. He stressed that we are not going to participate in the electoral key or the political element.

Garamendi also denounced the fact that he was not summoned to speak about an income agreement. He learned about it from the media. However, he spoke about European funds and stated that "it is crucial to talk about pensions in a hypothetical income arrangement." He pointed out that every point of increase represents an additional cost of 1,700m and that, if benefits are revalued using the CPI, the extra expense for 2023 could be 17,700 million. He warned that while we all want pensioners to be paid and wages to rise, the system should not collapse.

The leader of businessmen also requested that the Government clarify the situation with salaries for civil servants. It is still not known how much the increase will be for more than 2.5 million public employees. He said, "If we are talking about an income agreement we must know what we need to do."

In turn, the CEOE president stressed that the main concern for companies is "the main company in a country, which is State efficiency and its effectiveness." He stated that income agreements cannot be restricted to private activity, and that they were not "the bad guys in this movie." He recalled that they don't refuse to increase workers' wages but they are against indexing them to inflation. This would, he said, have negative consequences on companies' competitiveness.

The unions assembled in front of the CEOE headquarters hours before the Moncloa meeting to demand a wage rise and warn them that they will see a rise in mobilizations if they don't protect the purchasing power workers. UGT and CC OO expressed opposition to the income agreement, which implied a fall in wages. They demanded that the Government adopt a "courageous fiscal policy" that ensures a fair distribution of income.

"If they want an Income Pact, they must have two legs: price control measures and a fiscal pact that protects social groups in particular bad times. Unai Sordo, secretary general of CC OO, admitted that an income pact is possible in this situation.

Unions demanded that the Interprofessional Minimum Wage be reviewed. It rose from 1,000 euros per month at the start of the year to 1,050 euros per month in 14 installments due to inflation. We cannot let people who make a thousand euro without increasing their wages because of the CEOE closing. Pepe Alvarez, the leader of UGT, stated that if we don't achieve it through negotiations, we will demand it from the Government.

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