The Economy of Catalonia

Having said that, it is also important to underline that Catalonia’s deficit,
in relative terms, is far smaller than that of the rest of Spain. Thus, as can
be seen in Table 3, Catalonia’s average Social Security deficit in 2009-10
was €450 per capita in real terms, while in the rest of Spain it was as high
as €1,217. So whether there is a surplus or a deficit, these figures show
that Catalonia is a net contributor to the Social Security system elsewhere
in Spain, i.e. the contributions of Catalan workers help fund the
pensions of retirees in other parts of Spain, and not the other way round.
Catalonia
Spain without
Catalonia
Spain
Millions of € (real 2010 prices) 2009-2010 –3,394 –48,248 –51,642
€ per inhabitant (real 2010 prices) 2009-2010 –450 –1,217 –1,094
Source: Budget settlements of the Social Security system and of autonomous bodies, State agencies and
other public bodies, and Spanish Statistical Office (INE - Instituto Nacional de Estadística). Departament
d’Economia i Coneixement (2012): Informe sobre les aportacions de Catalunya a la Seguretat Social.
Table 3. Accrued balance of the Social Security system, 2009-2010
Balance = Income - Expenditure.
Conclusions
The analysis we have carried out contains a reassuring message for Catalan
citizens facing the prospect of Catalonia becoming an independent
country: Catalonia clearly has sufficient economic potential to finance
pensions. In fact the data show that there is greater cause for concern if it
continues to form part of Spain.
Another quite different question is the sustainability of the pensions system
in the long term, given that it depends on demographic and labour
market factors. One of the main challenges faced by the public pensions
system is obviously that there are more and more retired people because
they live longer as a result of increased life expectancy after retirement
age. We also need to keep in mind that over the next decade the baby
boom generation will retire, and, if current trends continue, they will do
so with a high life expectancy. So, given the current PAYG system, people
who are active in the labour market will have to fund pensions for an
increasing number of retirees. It is important to recall that other factors
also have a direct impact on viability, including the later age at which
Pensions in an independent Catalonia 179