The Social Security department said that it is on the verge of a negative account balance. In May, Spain's pension system had 7.9 billion euros in its accounts, all of which it will need to pay extraordinario benefits in June.
From now on, the decline in taxpayer contributions to Social Security, which is directly linked to rising unemployment, will make it difficult to get back in the black. To make payments and not go into debt, the system will utilize its savings -- not only the 67.9 billion euro Reserve Fund, but also the 7 billion euro Prevention Fund.
Pensioners will receive their checks, but it was known that this situation was going to happen, and the checks should have been frozen. Now the solution looks more painful, which the EU warned us about a long time ago.
