By Humphrey Carter

PALMA

THE President of the CAEB, Balearic Confederation of Business Associations, Josep Oliver, yesterday expressed his satisfaction that the government and the unions had reached a preliminary agreement with unions on pension reform.

Oliver said that the deal will open the door for much needed labour reforms and claimed that raising the retirement age to 67 is “reasonable considering we are fortunate enough to be living longer and are more active and this will also enable us to build a bigger pension.” The agreement reached late on Wednesday night is seen as another important step for the country to regain market confidence and avert another general strike.

The reforms, which raise the retirement age to 67 from 65, will not have a fiscal impact before 2015 but are considered key to showing investors the government is serious about structural change to revive its fragile economy and avoid a bailout.

The ministry declined to give details but media outlets said the agreement included the government's highly contested plan to raise the retirement age gradually from 65 to 67 under certain conditions.

The government has pledged to approve a pension reform today.
The bill is seen as crucial to its attempts to shore up public finances as it struggles to emerge from recession.
Unions have long opposed any changes in the retirement age and had threatened a general strike.
Spain is battling to reduce a euro-zone high near 20 per cent unemployment and a swollen deficit.

FIERCE PRESSURE
The country has also come under fierce pressure from bond investors in recent months over fears it may be unable to handle its debt and will need a bailout like Ireland and Greece.

El Pais said the two main unions have agreed to accept the age change but demand that people who have worked for 38.5 years can retire at 65 with full benefits.

The government had insisted on people working 41 years if they wanted to receive full pension at 65.
Workers who do not fulfill the requirements for a full pension at 65 will have to work at least 37 years and retire at 67 if they wish to receive full benefits.

Under the deal, the amount received will be calculated from a person's wages in the last 25 years of their working life, up from the current 15.
The negotiations have been going on for several weeks.
Unions called a general strike September 29 to protest the government's austerity measures and labour reforms.
The stoppage was partially successful, affecting mostly industry and transport but not services.
But, while the government unions and the business community appeared to be pleased that a satisfactory deal has been brokered, workers across the country staged a wave of protests, some extremely violent, against the reform package and repeated calls for the threatened general strike to go ahead.

While the government still has to iron out all the fine details of the preliminary agreement in time for the bill to be passed today, union leaders are going to find themselves coming under growing pressure from their members to call the general strike.

Here in the Balearics, for example, there is massive backing for the general strike and a large protest against the reforms was held in Palma last night with a second demonstration due to take place tomorrow evening.