Spain to raise pensions by 1 percent, unlock reserve fund

MADRID Fri Nov 30, 2012 8:14am EST

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MADRID Nov 30 (Reuters) - Spain on Friday announced it would raise state pensions by 1 percent to compensate for price increases this year and unlock a pensions reserve fund to ease liquidity tensions.

"In January 2013, pensions will be reviewed by 1 percent but pensioners who receive less than 1,000 euros a month will get a review of 2 percent," Spain's Deputy Minister Soraya Saenz de Santamaria said at a news conference following the weekly cabinet meeting.

Under Spanish law, pensions should be reviewed each year in line with the inflation data of November, which emerged at 2.9 percent on Friday.

Saenz de Santamaria also said a new law had been passed to unlock the state pensions reserve fund and ease liquidity tensions around pension payments until the end of the year.

Labour Minister Fatima Banez said the review should not prevent Spain from meeting its deficit target of 6.3 percent of Gross Domestic Product this year.

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