Spanish raid pension reserve fund a second time
THE SPANISH government has raided a government piggy-bank for a second year. Created in 2000 to guarantee pension payments, its €59.3bn Fondo de Reserva was tapped for the first time in December for €7bn to fund Christmas bonuses and a monthly increase for retirees. Further withdrawals will have taken an additional €4.5bn, helping to pay for pensioners' summer bonuses and tax refunds.
"The fund isn't in a position to accumulate assets anymore, it may even have to sell," said consultant Jose Antonio Herce yesterday. "There are more pensions to pay and less money coming into the Social Security, the fund will melt quickly now that we've started taking money out of it," he said.