Spain to propose raising pension age

MADRID
SPAIN will propose lifting the pension age from 65 years yesterday as an aging population strains an already stretched social security system, the Minister of Public Works Jose Blanco said. “(A proposal will) come in the next few hours,” Blanco said during a radio interview.
The government declined to provide further details, but the reform would not go as far as extending the age to 70 years, Labour Minister Celestino Corbacho said before a meeting with European Union labour ministers in Barcelona.

By 2049 almost one in three people in Spain will be 65 years or over, double the present level, if the present aging demographic continues, the National Statistics Institute said earlier yesterday.

Last year, Spain launched one of the world's largest stimulus plans in relative terms against the economic crisis, turning the 2007 public surplus into a deficit of around 10 percent of gross domestic product in 2009.

The widening public shortfall has sounded alarm bells throughout debt markets already spooked by fears Mediterranean neighbour Greece would be unable to service its heavy debt pile.

Spain's government has repeatedly said it will meet the European Union public deficit guideline of 3 percent of GDP by 2013 and is expected to announce an austerity plan aimed at reining in debt today.