Saturday, 01 December 2012 04:06
MADRID: Spain will not make its usual end-of-year review to adjust pensions for 2012 inflation, the government said on Friday - a move to meet deficit goals that hits around 9 million retired people.
The government, breaking an electoral campaign pledge, said it would instead raise pensions by 1 to 2 percent in 2013 and tap reserve funds to ease liquidity tensions around pension payments.
Spain's fiscal situation left no choice over the decision as meeting a 2012 deficit target of 6.3 percent of output was the top priority for Spanish authorities, the centre-right government said.
"It was a difficult, painful decision because it was the last thing we wanted to do, but we had no other choice," Labour Minister Fatima Banez said at a news conference following the weekly cabinet meeting.
The move was unexpected as Prime Minister Mariano Rajoy had said earlier this year that he would protect pensions, the only remaining ...