14 February 2008

MADRID - Spain's Social Security system is on track to post a surplus in excess of the government's EUR 8-billion target this year, even in the light of recent increases in unemployment and slower growth in many sectors of the economy, Labour Minister Jesús Caldera said on Wednesday.

Speaking at a conference on the economy organised by Spanish business newspaper Cinco Dias, Caldera rejected "alarmist" claims about the supposed ill health of the jobs market after the number of people looking for work soared in December and January.

"The Spanish economy is still functioning well and creating employment," Caldera said, noting that even during the slower job market of the last two months contributions to the Social Security system increased by EUR 1.2 billion, or 6.6 percent.

The minister said that so long as that rate of growth continues until the end of the year, the government will surpass its target of EUR 8 billion, and would be on track to boost the Social Security reserve fund to around EUR 90 billion within four to six years. That, Caldera said, would ensure Spanish pensions could continue to be paid for at least a decade without the system running a deficit, overcoming at least some of the difficulties presented by an ageing workforce.

Caldera is heading the Socialist Party's campaign for re-election in the 9 March general election.

[Copyright EL PAÍS 2008]

Subject: Spanish news