Today the acting Ombudsman of Spain, Francisco Fernández Marugán delivered the Annual Report of 2017 to the General Courts, which includes an analysis of the consequences of the economic crisis in the application of social rights.
As he explained, “it is precisely in times of crisis when an institution such as the Ombudsman must ensure that a minimum of social rights are guaranteed by the public authorities to the entire citizenry and especially to the most vulnerable sectors of the population”.
In his opinion, “the crisis has caused a huge social cost and has separated us from the convergent path with the European Union sustained since the beginning of democracy”.
The complaints that come to this institution show that, despite the fact that the recession may be over, the recovery is not reaching the pockets of the Spaniards equally and there are many citizens who need the State to support them.
“Now that the economy is in a clear process of recovery, an opportunity opens up to review the functioning of social policies,” said Fernández Marugán.
Furthermore, he stressed that the improvement of social policies “would affect the income and consumption of groups that still do not reach to cover their basic needs with dignity” and has given the example of “retirees, dependents, the long-term unemployed, families with all their members unemployed, young people without work and without the right to unemployment benefit, and the working poor”.
In the opinion of the Ombudsman, the austerity policies applied during the crisis have created an unprecedented well of inequality and have damaged the institutional framework and social cohesion. For this reason, the institution is particularly concerned that the maintenance of these policies increases poverty more severe and therefore inequality.
In addition, the Ombudsman warns that it is a mistake to assume that when the crisis comes out, inequality is reduced by itself and that this scourge can only be corrected if an active and determined policy of redistribution of income is carried out.
The text presented today analyzes the role of benefit policies during the economic crisis and its impact on the evolution of social spending, the labor market, the implementation of the dependency protection system, the public pension system, and access to social security as well as housing, among others.
Social Spending
The crisis meant a fall in the provision of public services and a decline in public investment to record lows.
According to the analysis of the Ombudsman, spending on housing, health and education grew until 2009, when they jointly accounted for 12.7% of GDP. In 2016, they fell to 10.5% of GDP. Public health spending fell in that period by 5,341 million euros and the adjustment in public spending on education was 4,778 million.
This setback has not been compensated with new social policies, nor with improvements to existing ones. For this reason, and to alleviate the loss of quality of essential services such as health, education and assistance, the Institution considers it necessary to urgently reform the current financing system of the Autonomous Communities.
Employment and working conditions
The growth of inequality was exacerbated during the crisis by the loss of employment and by public policies that have not favored equality, as have been the recovery of competitiveness via salaries and the containment of the public deficit with incidence on social benefits.
In addition, the Spanish labor market has characteristics that enhance inequality, such as the fragility of employment, high rates of temporary employment and the evolution of wages. This particularly affects the employment of young people and women.
Dependence
The economic crisis and the measures adopted in the face of the serious financial and budgetary situation of the Public Administrations have also hampered the implementation of the Dependency Law.
For the Ombudsman, it is necessary to improve the current financing system and guarantee the incorporation of people on hold. Likewise, the recovery and sustainability of the System for Autonomy and Care for Dependency (SAAD) must be achieved and the financial efforts of the General State Administration and the Autonomous Communities must be equivalent.
Pensions
The analysis of the Ombudsman notes that the progressive overcoming of the most serious effects of the economic crisis has not led to an improvement in the financial situation of the Social Security system. In spite of the remarkable rhythm of economic growth of the last three years and the vigorous creation of employment and recovery of the number of contributors, the imbalance of the accounts of the system has been enlarged to stand at 18,800 million euros in 2017.
The magnitude of the imbalance in the coming years, although minor, is still worrisome and requires the adoption of measures since it seems difficult that in the short term the rebalancing can be achieved simply through the recovery of jobs lost during the hardest years of the crisis and a progressive improvement of salary conditions.
The Ombudsman considers it necessary to guarantee the solvency and sustainability of the public pension system, as well as the economic adequacy of current pensioners and future ones, but any reform of the system, and in particular its financing, must be carried out in the framework of the Toledo Pact with the highest level of consensus possible.
Housing
Regarding one of the most harmful social effects of the crisis, the evictions, the Institution insists that we must continue working to strengthen the protection of the mortgaged and remember that the foreclosure procedure remains a reality in Spain.
As noted, Spain is still far from current systems in other European countries, where it is possible a “second chance” for the defaulting borrower, especially for the insolvent in good faith.
In addition, the Ombudsman points to the need to strengthen the supply of social housing for rent and advocates to establish up-to-date records of housing demands in each municipality and make agreements with financial entities and with Sareb.
Fiscal Policy
In the opinion of the Institution, the tax policies decided during the crisis have aggravated the process of regressivization of the tax system and have done so, during a period in which, for the majority of the population, income has been stagnating or decreasing.
In order for taxes to help improve the distribution of income, the Ombudsman considers that it is necessary to deeply revise the architecture of the system. Thus, he argues that more redistributive taxes are needed and coordinated with social benefits.
Change of Course
The Ombudsman wanted to conclude this analysis of the impact of the crisis on society by ensuring that “the path of adjustment has come to an end”. In his opinion, in order to adequately maintain social rights, “it is time to orient economic policy towards more balanced areas, to lead it to broader and more committed territories, away from those we have been threshing to overcome the recession.”
“Even if only because the destruction of the crisis in the productive system, in the social fabric and in the institutional space are the real factors that hinder – and not a little – the public perception of recovery,” he remarked.
Fernández Marugán has assured that we “must turn to the social pact that prevailed in Europe and Spain in past decades” and warned that if there are no profound changes in redistributive policies “the social unrest we are witnessing will be accentuated”. To avoid this, he insisted that “issues related to redistribution must come to the forefront of the public authorities’ agenda”.
