The Social Security accumulates a debt with the State of 106,177 million euros at the end of 2021, which, to a large extent, is on its way to becoming perpetual. The first part of this debt corresponds to 11 loans granted between 1992 and 1999, equivalent to almost €17.2 billionto meet the obligations of the extinct Insalud, at that time when the PSOE universalized healthcare.
1992-1999: The healing years
None of those ten year loans has yet been returned to the State. As the time for its expiration has been approaching, the Government of the day has been expanding in 10 years plus the cancellation period. For some of them the ball has moved forward until 2027. “There is no reason that justifies that this indebtedness remains in the Social Security balance indefinitely,” said the Court of Auditors in its audit report on this body as early as August 2020. “Reasonable, after having elapsed almost 26 years since the first obligations were entered into with the General State Administration and the first loan was granted (1992 financial year), solutions are adopted for its definitive reorganization”, added in that report the Court of Accounts. “These loans would not have been necessary if, previously, the State had paid to the system the amount of the expenses that [la Seguridad Social] he had to assume on his own”, added the supervisory body.
2000-2018: The age of the Reserve Fund
In the period between 2000 and 2009, Social Security did not need new borrowing. Before, on the contrary, the succession of green numbers in their accounts made it possible to feed the piggy bank of the recently created Reserve Fund, where more than 77,000 million euros were accumulated, which were later depleted between 2012 and 2018, to meet the payment of the contributory pensions; in particular, the payment of their extraordinary payments.
2017-2023: Debt explosion
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Once the Reserve Fund was exhausted, the State has continued to cover the financial needs of Social Security with new loans – instead of transfers – to cover its successive deficits. Thus, the Social Security debt, which in December 2017 was 27,393 million euros, according to data from the Bank of Spain, has almost multiplied by four to exceed 106,000 million in December 2022.
However, contrary to what one might imagine, all this indebtedness of Social Security with the State has hardly generated interest payment to the body in charge of paying pensions. Between 1995 and 2009, the interest charge totaled 192 million euros. Since then, the chapter on payment of interest from Social Security to the State is zero euros.