Montoro said yesterday that the slight increase in the national deficit during Q1 2012 was due to what is happening with the Social Security system.
Therein lays the problem. Specifically, only 25.854 billion euros in revenues have been collected from Social Security contributions of Spanish workers. Extrapolating this figure across the rest of the year yields a far smaller amount of revenues than the 106 billion euros that are budgeted for.
Further, spending on pensions, which was predicted to increase by 2.9%, has grown 4.51%. Continuing at this rate, there will probably be no more workers contributing to Social Security, and the number of pensioners drawing Social Security will not likely decrease. So we could end the year with 3 billion euros less than expected in revenues and 1.6 billion more than expected in costs.
And the 4.94 billion outstanding deficits could eat up July bonus payments. Houston, we have a problem!
