The Government is taking steps to provide non-professional caregivers with the opportunity to retire early, similar to other professions that have particularly challenging working conditions. Minister of Inclusion, Social Security and Migration, Elma Saiz, confirmed this during a session in the Congress of Deputies after receiving a parliamentary question on the matter.

The request was made by Maribel Vaquero, a deputy from the PNV party. She urged the Government to include non-professional caregivers of individuals with high dependency in the list of professions eligible for easier early retirement. Currently, the Government is in talks with unions and employers to redefine this list of professions.

According to Saiz, the Government is making progress in drafting the text and seeking consensus. She emphasized that there are situations that involve significant physical or mental demands, particularly as one ages, and the Government intends to address them as soon as possible.

Saiz added, “Caring for a highly dependent person is an incredibly challenging task, especially if one is also employed. It is an unavoidable challenge, and we are committed to providing a firm and sustainable response that aligns with our society’s current model.”

In Spain, there are approximately 77,401 non-professional caregivers who have formal agreements for providing care. These caregivers are usually family members or close relatives of individuals with high dependence. They are recognized under the dependency law and receive financial support due to the significant amount of time they dedicate to caregiving.

Since April 2019, these caregivers have been contributing to Social Security, entitling them to future pension rights, including retirement benefits. In cases of severe dependency, the state covers 100% of the minimum base (1,323 euros per month in 2024). For less acute dependency, the administration pays a percentage of the minimum base based on the degree of dependency. Non-professional caregivers can also combine their caregiving responsibilities with part-time work or unemployment benefits, but they are unable to work full-time unless their contribution base is lower than the agreed-upon amount in their special agreement with Social Security.

In the process of reform

Negotiations are currently underway for the reform of the catalog of professions that enjoy more favorable reduction coefficients for retirement. The discussions are taking place within the context of social dialogue, but progress has been limited, according to union negotiators present at the meetings.

Statements made by unions following recent meetings highlight the main point of disagreement, which centers around determining the professions that should be eligible for early retirement due to hardship. Carlos Bravo, a representative of CCOO, stated, “There are difficulties in determining which groups have the greatest need.” Technical discussions are now taking place.

Cristina Estévez expressed concerns, saying, “The text has improved significantly, but we still lack specificity regarding hardship. It appears that feminized professions with high levels of hardship, such as housekeepers, dependency assistance, and home help, would continue to be excluded. We do not see the possibility of accepting such a regulation.”

Yolanda Díaz will take decisive action to uncover instances of fraud related to the use of trial periods in employment contracts. Specifically, the Labor Inspection, under the leadership of Minister Díaz, will closely examine contracts that are terminated due to failure to pass the probationary months. The Inspection will also closely monitor cases in which workers are dismissed for the same reason, despite having previously been hired for the same role.

This announcement was made by the Minister of Labor through a press release issued earlier today. Díaz emphasized that it is unacceptable for the trial period to be misused as a means to deny workers their right to job security. “We will not allow this period to serve as an excuse for fraud. The era of disposable workers is over,” added the vice president.

Díaz has tasked the Labor Inspection with identifying any potential irregularities in order to prevent such situations. The Anti-Fraud Tool, utilized by inspectors, enables cross-referencing of databases to detect signs of fraud and enhance their efficiency.

The strengthening of surveillance measures comes a day after the Bank of Spain reported a decrease in the longevity of permanent contracts since the labor reform took effect. While contract rotation has indeed reduced following the regulatory change, the bank attributes this to the increased number of individuals now employed with indefinite contracts.

Nevertheless, open-ended contracts have become less stable. The Bank of Spain highlights that only 48% of indefinite contracts formalized in March 2022 (when the reform went into full effect) survived one year since signing. Prior to the regulatory change, the percentage stood at approximately 52.5%. This reduced stability is influenced by the increase in discontinuous fixed contracts, which have experienced a withdrawal rate rise from 1% to 2% following the reform.

The duration of trial periods is determined by the relevant collective agreement. In the absence of such an agreement or its failure to address the matter, the Workers’ Statute establishes a maximum trial period of six months for skilled technicians and two months for other workers. In companies employing fewer than 25 individuals, this period is limited to three months (excluding skilled technicians), while temporary contracts lasting six months or less cannot impose a trial period exceeding one month. Moreover, it is prohibited for a worker who previously performed certain functions within the same company and is rehired to be subjected to the trial period once again.

An increase in terminations for failing the trial period has been observed since the implementation of the labor reform. The number of registered workers with indefinite contracts without a fixed term has quadrupled since the reform. In 2021, there were 116,522 new registrations, which significantly rose to 492,958 in 2023. However, this surge in permanent employment has been accompanied by a rise in dismissals due to failure to pass the trial period. In 2021, 3,588 dismissals were recorded for this reason, whereas last year saw 34,173, a 9.5-fold increase compared to the pre-reform period.

While it is reasonable to expect an increase in dismissals for failing the trial period with a rise in permanent employment, the relative growth in terminations has been twice as high as the number of new permanent contracts. In 2021, there was one termination for every 33 new permanent contract signings. However, in 2023, this proportion decreased to 14 new registrations for each dismissal during the probationary period.

The mismatch between supply and demand has unleashed the perfect storm in the rental market. The number of apartments available for rent has been reduced by 23% in Spain compared to before the pandemic. In parallel, since 2019, demand has grown more than 200%: in the first ten days since an apartment is offered for rent, an average of 50 people are interested in each advertisement, when five years ago they did not reach 17. The situation is especially alarming in some areas of the country. Along with the archipelagos, Catalonia and Madrid stand out among the regions where the most applicants are competing for the same apartment, while the Valencian Community and Andalusia are among those where prices have increased the most.

This is the photograph that emerges from the data of the first rental barometer prepared by the Safe Rental Foundation in collaboration with the Rey Juan Carlos University (URJC). This research is the work that launches the Rental Observatory, a study center launched this Wednesday by both organizations with the aim of offering data and information on the rental market and promoting transparency in the sector.. “It will not only allow us to analyze supply and demand, but also evaluate the impact of public policies carried out on the housing market,” researcher Fernando Pintor, professor at the URJC, explained in the presentation.

The figures released this Wednesday confirm that the supply of apartments for rent is increasingly smaller, while demand continues to grow. These contrary trends push prices up. Before the pandemic shook the real estate market, there were 982,194 apartments available for rent in Spain, according to the barometer, created using real estate data.. This volume remained stable in 2020 and rebounded in 2021 to exceed 1.05 million apartments. Since then, the drop in supply has been unstoppable until reaching 754,360 homes available for rent in 2024, a projection prepared for this year based on the data available for the first quarter.. This figure is 7.3% lower than that of 2023 and is 23.2% below the pre-covid volume.

The lower availability of apartments for rent, which the authors of the study attribute to the legal insecurity and uncertainty faced by owners, has meant that supply is not able to absorb demand.. In this way, the pressure to get one of these properties has skyrocketed.. Although the situation is very heterogeneous in different parts of the country, there are regions in which families face significant difficulties in accessing these accommodations.

The Balearic Islands and Santa Cruz de Tenerife are the areas where rental advertisements arouse the most interest: on average 143 and 103 people respectively contact each offer in the first ten days. The authors of the barometer point out that the situation must be considered risky from 15 interested parties per home, a limit that Extremadura, Castilla y León, Murcia and La Rioja are the only regions that do not exceed -Aragón, Castilla-La Mancha and Galicia touch it.

Barcelona also exceeds the threshold of 100 people, despite the fact that before the pandemic the figure stood at 17.5. Currently, on average it only takes 15 days from when an apartment goes on the market until it is rented.. The pressure from this province strains the situation of the entire autonomous community, where there are 129,372 available for rent. Catalonia is the third region with the most housing offered, but at the same time it is also the fourth where the volume has decreased the most since 2019, when the number of properties in the rental market was close to 200,000 units and exceeded 217,600 in 2021 .

Among the communities with the greatest mismatch between supply and demand for rentals is also Madrid, where on average 63.4 people are interested in each apartment available on the market, above the national average and the 20.7 that they did in 2019. The supply in the region has been reduced by 21.7% in the last five years to 144,552 homes available. The pressure from Madrid has spread to neighboring areas. “In Segovia, the rental market is highly influenced by the proximity to Madrid,” exemplifies Sergio Cardona, head of sustainability and quality at Safe Rental.

The situation is somewhat less tense in the Valencian Community, where an average of 44 people are interested in each apartment during its first ten days on the market, four times more than in 2019.. However, the pressure is very different between provinces, since in Valencia the figure exceeds 63 contacts per advertisement, while in Castellón it does not reach 9. The same happens in Andalusia, where this indicator is around 30 people in Málaga and Córdoba, but barely exceeds 10 in Granada.

Rising prices

These imbalances have pushed rental prices up.. At the national level, the average monthly rent has risen to 1,069 euros in the first quarter of 2024, an amount 24.7% higher than the 857 euros that each tenant paid on average per month in 2019. In the last year alone, prices have grown by 6.7% compared to 2023.

No autonomous community escapes this trend. The Valencian Community, the Canary Islands, Castilla-La Mancha and Andalusia have been the ones that have registered the most pronounced increases in the last five years, with increases of between 40.7% and 32.9%. However, the Balearic Islands, Madrid and Catalonia top the ranking of autonomous regions with the most expensive rents, with average rents of 1,591, 1,460 and 1,361 euros per month.

The eurozone is beginning to emerge from an extended period of stagnation, with recent indicators showing a slight uptick in activity. The April Purchasing Managers’ Index (PMI), a key measure of economic dynamism, reached its highest level in eleven months, indicating a modest expansion of activity. However, the growth has been uneven across sectors, with services driving the growth while the manufacturing industry remains in contractionary territory.

Germany has returned to the growth zone for the first time in ten months, thanks to growth in services and a slower decline in manufacturing. France, on the other hand, is still in contractionary territory but gradually approaching positive growth. The employment situation has remained relatively stable, with unemployment rates at historic lows despite the stagnant economy.

Analysts predict a growth rate of 0.3% in the second quarter, which would mark a significant improvement for the eurozone. However, it remains to be seen if this is a true recovery or just a temporary improvement. Overall, the PMI data paints a reasonably optimistic picture of the eurozone economy and suggests a potential rebound in GDP growth in the coming months.

The European Central Bank (ECB) is making significant strides towards lowering interest rates, signaling a shift in monetary policy after a two-year period of increases. Vice President Luis de Guindos, a former Minister of Economy in Spain, recently stated in an interview with Le Monde that a rate cut in June is highly likely. This news comes as a relief to those with variable rate mortgages, who have been eagerly awaiting a reduction in interest rates to ease their monthly payments.

While de Guindos remains cautious and believes the battle against inflation is not yet won, he sees the end in sight. He emphasizes that decisions will be data-driven, with the main threat being inflation in services driven by rising salaries. In March, inflation in this sector was at 4% in the eurozone, according to ECB data.

De Guindos acknowledges the need for salary increases to compensate for lost purchasing power but emphasizes that it must be accompanied by improvements in productivity, which is currently lacking. Productivity remains a persistent challenge for the eurozone economy, with levels still below pre-pandemic levels.

Another concern for central banks globally is the geopolitical situation, particularly with ongoing wars in Ukraine and Gaza. The price of oil, despite the instability in the Middle East, has remained relatively contained, but it remains a key focus for global economic stability.

Those eagerly awaiting a drop in interest rates are the approximately four million households in the country with variable-rate mortgages. The ECB’s official interest rates directly impact the Euribor, which is used to calculate monthly payments for variable mortgages. Banks often adjust their interest rates based on ECB decisions, and a rate cut will result in lower mortgage payments.

The hope is that the Euribor will start to decline significantly, resulting in lower mortgage payments. While the indicator reached its peak in October of last year at 4.16%, it has since stabilized around 3.7%. Several interest rate cuts by the ECB are expected to lead to reductions in the Euribor, but substantial downward revisions may take time. In April, the one-year Euribor averaged 3.698%, similar to March.

All eyes are now on the next monetary policy meeting on June 6 in Frankfurt, where the ECB will make its decision on interest rates. The magnitude and potential for additional cuts will depend on incoming data and the actions of other central banks, particularly the US Federal Reserve. While de Guindos remains cautious about what may happen after June, some ECB colleagues have suggested that interest rates could be reduced by 100 basis points throughout the year. This aligns with the ECB’s objective of achieving 2% inflation.

A 100 basis point drop would bring the official interest rate for deposits at the ECB down from the current 4% to 3%, and the main refinancing operations rate, which influences the Euribor, would decrease from 4.5% to 3.5%. Governor Mário Centeno of Portugal and other governors, including Klaas Knot of the Netherlands, Madis Muller of Estonia, and Gediminas Simkus of Lithuania, have expressed inclinations to lower interest rates in recent weeks.