For the first time, the Spanish government has defaulted on pension payments to federal workers and military personnel who don´t qualify for regular pension funds.
Clases pasivas pension funds are included in the federal budget, but not in the social security budget.
The payment amounts have tarried nearly a week and could equal nearly 1.4 billion euros, causing liquidity problems for state accounts. Reality is setting in.
Deposits have been adorned with tax hikes, but it is true that IRPF and Sociedades (two Spanish taxes), the most substantial of the tax collections, have had to pressure the Treasury so that they resort to debt that is more difficult and expensive to carry. It is hard to draw too much milk from a single cow.
Translated and Edited in English by Brandon Dyches and Jose L. De Haro
