The Spanish government will employ the €66 billion Social Security Reserve Fund solely to pay pensions and not to finance regional debt, according to the country's investment and pension fund association, INVERCO.
Angel Martínez-Aldama, director at the association, said: "The government has withdrawn €3 billion out of the Social Security Reserve Fund not with the view to helping Catalonia or any other region, but for paying pensions. This has always been the sole objective of the reserve fund and its only purpose, as stated in law." However, Martínez-Aldama did acknowledge that the government was still looking to buy bonds issued by indebted regions after Catalonia announced at the end of last month that it would request a €5 billion credit line from the central government to refinance its debt.
Meanwhile, a study by Xafinity Consulting has concluded that Spain's recent bailout by the European Central Bank played a "significant" part in bringing down deficits at UK corporate pension funds. It said the Spanish bailout and its easing of fixed interest yields on both corporate and government bonds "must be hailed as good news".
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