The Social Security system finished 2012 with a 10 billion euro deficit. This was a a major scare for the Spanish government, which should have forecasted the shortage when it made the decision to not freeze pensions last year.
The deficit, combined with increasing unemloyment, will force the government to make some hard decisions if it does not want to extend the Social Security deficit further in 2013.
To trim the budget, the government has stiffined early retirement conditions by increasing the minimum age people can draw a pension -- whether retirement is required or voluntary.
The goal is to save 5 billion euros between now and 2027 and practically do away with early retirement options. These goals will extend the number of years that Spanish citizens work and boost the sustainability of the nation's pension system.
