Spain Goes Into Debt To Fill The Pension Pot
Can you imagine taking out a loan to open a bank deposit? Well, that is what Spain is doing to fill the pension fund with 7 billion. Last year, the pension system needed to borrow 50 billion from the state to meet pension payments. This 50 billion shortfall is exactly 3.6% of GDP. And it is exactly the figure for the Spanish public deficit in 2023.
But that is no obstacle for the Government to have decided to endow the so-called pension piggy bank with 7,000 million, a reserve fund that reached 7,022 million euros in May, the highest since 2018, while the Social Security debt exceeds 116,000 million euros.
The pace of spending has led to the Social Security doubling its debt in just four years, going from liabilities of 55,000 million in 2020 to 116,000 million at the end of last year, according to data from the Bank of Spain.
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