The PP stumbles again with pensions a month and a half from 29N and Vox gives the recipe: privatize them

The Spanish government has halted its initial strategy to sell off the entire real estate portfolio of Muface, the general mutual insurance fund for civil servants, in order to secure funding for pensions. This reversal follows the high-profile eviction of Maricarmen Abascal, a deceased beneficiary whose case drew public attention to housing issues. A spokesperson for the Ministry of Digital Transformation and Public Service confirmed that, pending parliamentary approval of the latest housing decree, the administration will transfer the management of these properties to Casa 47, a state-owned enterprise under the Ministry of Housing. Under this new arrangement, Muface will retain ownership of the assets, abandoning the previous plan known as Muface Avanza 2 2026-2028, which aimed for a total liquidation of the portfolio. The strategic shift corrects an authorization previously granted by the ministry to Muface to sell its real estate holdings within two years. The original objective was to capitalize on rising housing prices to generate resources for pension obligations. The action plan, approved at the end of 2025 by State Secretary for Public Service Consuelo Sánchez Naranjo, required that the study, valuation, and sale of the Special Fund’s real estate heritage be activated by autumn for a progressive disposal. The Special Fund covers pensions for public employees and their heirs who were enrolled in mutualities prior to the creation of Muface in 1975. According to the approved plan, the Special Fund’s real estate heritage currently consists of 204 properties, including garages and commercial spaces, with approximately 90 residential units. Muface justified the operation by stating that these assets are legally dedicated exclusively to financing the fund's benefits and that liquidating them was key to addressing the capitalization of pensions. The fund requires annual financial injections from the state to meet its obligations, and selling properties at favorable prices was intended to reduce this public aid. The state company Segipsa had been tasked with managing the sales process before the policy change. A ministry spokesperson emphasized that the Muface Strategic Plan predates the royal decree-law currently awaiting validation by the Permanent Commission of Congress. The decree establishes that Casa 47 can manage the properties and dedicate them to the government's affordable housing policy through asset-based businesses that grant usage rights, while Muface and the Royal Boards maintain title. The episode illustrates a pivot in the government’s approach to the public housing park. Previously, the focus was on maximizing returns from real estate assets during a price bubble. Since the eviction of Maricarmen Abascal, the government has opted to retain housing within public entities like Muface. While Muface has held auctions in recent years, the strategic plan represented a qualitative leap toward total asset sales. This earlier approach aligned with efforts to monetize state resources to lower public deficit but conflicted with the current political stance of the ruling Socialist Party, which opposes doing business with housing during the electoral campaign. Similarly, the bad bank Sareb has shifted from attempting to sell its real estate and land to ceding much of it to Casa 47. However, the state recently awarded a contract worth 52 million euros to Aliseda, a subsidiary of Blackstone, to manage Sareb housing destined for the state public park. Blackstone has been criticized by Prime Minister Pedro Sánchez and party members over this arrangement. Separate from the Muface administrative changes, the future of Spain’s pension system has become a central issue in the lead-up to the general elections scheduled for November 29. The People’s Party (PP) faced internal contradictions regarding its stance on pension sustainability. PP spokesperson Ester Muñoz stated in a podcast interview that the current model would collapse and that bold measures would be necessary to guarantee its viability. She noted that those leaving the workforce receive higher pensions, while salaries supporting them are low, citing demographic data showing a widening population pyramid in the middle age ranges. Party sources referred to commitments made by PP leader Alberto Núñez Feijóo, who pledged to guarantee the viability of the public system for young people and maintain pension increases according to the Consumer Price Index (CPI). On Tuesday, Feijóo reiterated that he would ensure the viability of the public pension system for those who have not yet received payments and are doubting whether they will. He added that those who contribute have a right to a pension and that updates would be guaranteed in accordance with the CPI index. However, he also stated that young people have the right to a viable public pension system, a comment that aligned with Muñoz’s assertion that the system would burst. This created a conflict in the second week of the pre-campaign, forcing the PP to position itself on the future of pensions amidst inconsistent messages from various spokespeople. Economy Minister Carlos Cuerpo urged the PP to clarify contradictory and catastrophic messages, noting that the PP leader had said the system would remain intact while others claimed it was doomed to bankruptcy. The PP had previously suffered a credibility hit in the 2023 campaign after claiming they always raised pensions above inflation, a statement that was disproven. Vox, a likely coalition partner for the PP, has defended a privatized model. Vox economic head José María Figaredo questioned the public pension system, alerting PP strategists given the importance of the roughly ten million voters who are loyal to the polls. The demographic challenge includes an aging population, the retirement of the baby boomer generation, and low birth rates. A report by trade union CCOO and the First of May Foundation warned that foreign immigration increasingly fails to compensate for demographic aging. Despite efforts to promote delayed retirement options, significant numbers of voluntary early retirements continue among those aged 54 to 64. The Independent Fiscal Responsibility Authority (AIReF) warned last year that by 2050 there will be only one worker per pensioner, compared to two currently. Pension spending exceeded 189 billion euros in 2025, a 6.2 percent increase from the previous year. Recent reforms, including flexible retirement mechanisms, have contributed to stability, as noted by the Applied Economics Research Foundation in a September report.