All accounts in one place and more secure

PSD2 is the European directive that regulates electronic payment services in the euro area. The new regulation, which updates the one from 2007, introduces strong measures in the field of cybersecurity. 11Onze will be guided by this directive. We explain its advantages to through agent Jordi Oller.

The new PSD2 directive came into force in Spain in December 2020, following the approval of Royal Decree-Law 19/2018 on payment services. This regulation sets out the rights and obligations of both institutions and customers with regard to payment services. “It seeks to meet the security needs in a context of strong technological advances in the field of e-commerce,” Oller explains.

PSD2, therefore, regulates all payment transfers, direct debits, card payments and other banking transactions in Europe, and aims to make all payment services in the financial sector more transparent, more competitive and more innovative.

Protecting ourselves from cyber-attacks

First, PSD2 introduces strong measures in the field of cybersecurity. Among other things, a double authentication or reinforced authentication when allowing banking transactions, a procedure that substantially reduces the risk of identity theft. It is for this purpose that financial services institutions have to offer their customers an API, i.e. an Application Programming Interface. “The new APIs give flexibility, simplify design and use and allow innovation in new services,” says our agent 11Onze. At the same time, these financial institutions have to share information with other companies, as long as they have the customer’s consent.

In addition, now, with PSD2, companies cannot access customers’ sensitive financial data. And banks have to establish account access, the so-called XS2A, which is popularly known as open banking, because they are obliged to provide the necessary interfaces so that people can access their account data, provided they have given their consent. “So, for example, users can view all their accounts in one place or make online payments by bank transfer,” Oller explains. You may have read it at La Plaça. From October 1st, 11Onze’s interface will be El Canut, a state-of-the-art application, a digital wallet where you can make all kinds of different transactions and manage several accounts at the same time. 

The new PSD2 also offers solutions to ensure that transferring of sensitive data, via APIs, is carried out without any risk for the client and that data protection is guaranteed by two different means: the QWAC certificate and the QSealC certificate. For online transactions, therefore, it is no longer sufficient to ask for the customer’s debit or credit card, but a double authentication (Strong Customer Authentication, or SCA) is also required. In short, at least two of the following three factors are required for a transaction to take place:

• What the client has, such as a debit/credit card or mobile phone.
• What the client knows, e.g. a bank password or a PIN that is sent to the mobile phone.
• Who the client is, i.e. an ID, be it a fingerprint or facial recognition, some biometric identification parameter.

Less fraud, better online shopping

All in all, PSD2 makes e-commerce much safer, because it prevents fraud through stolen or duplicate cards and avoids chargebacks. In addition, it also makes online shopping more user-friendly. “It facilitates authentication processes, thanks to biometric identification parameters or mobile payments instead of card payments,” explains our agent 11Onze.

Last but not least, PSD2 provides incentives to reduce the costs of online transactions. “It frees up access to banking interfaces, and allows more companies to compete in this payment ecosystem,” Oller concludes. It should be noted, however, that only transactions where the card issuer is European, i.e. from the 27 EU countries, or where the acquirer, or the financial institution that processes the transaction on behalf of the merchant, are also European, will be subject to PSD2. Undoubtedly, what is clear is that with 11Onze you are going to be secure.

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“Economic independence means that you don’t depend on anyone or anything to live”. Plain and simple. That’s how clear our financial director, Oriol Tafanell, is. We follow, step by step, his advice, and we answer how the 11Onze community will reach it.

First, however, we need to ask ourselves why it is so important to empower ourselves. “Economic independence allows you to decide what you want to do in life and this, even though we often separate the heart from the brain, makes you emotionally stronger,” Tafanell says right at the start. With financial independence, we forget the stresses, the nerves, the sleepless nights and the anguish. Economic independence, then, is first built individually, and then we struggle to achieve it collectively. Let’s see it!

Three tips for individual emancipation

1. Make a budget. Our CFO is concise: “The most basic thing is to make a budget, to know what income you get and what expenses you have,” he says. If the income is not enough to pay all the expenses, the most logical thing to do is to reduce the latter. And he gives an example: “If you have made a budget thinking that you will pay a rent of 1,000 euros a month, but then you add clothes, food, supplies, and it is not enough, maybe you have to see if the rent you have is too high. If you get obsessed, or you know you can’t reduce the expense in any way, you have to look at how to get more money.” For Tafanell, it is very important to know how much money we have, how we manage it and, for this reason, he considers an application like the one 11Onze’s clients will have, El Canut, to be essential: “People will have the possibility of seeing where and how their money is, they will learn how to manage it, how to move financially. It’s a tool,” he says.
2. Force yourself to save. Even if you have achieved a stable balance between income and expenses, Tafanell recommends that income should always exceed expenses, for one simple reason: uncertainty. “You have to be able to deal with shocks, and in life they happen all the time: because you lose your job, because your fridge breaks down… Any situation can cause a crisis. Then, what will really make you financially independent is that your income allows you to save,” he says. 
3. Detail what you have to spend the money on. Finally, our financial director reminds us that each stage of life has to set savings priorities. “So, when you are young, if you study thanks to your family, it is important to work to save. Later, you live as a couple, you have children, or you build a career path, and savings are used to be able to pay for what’s coming up. And, in the end, when we are old, we have to invest our savings in a good pension plan, in retirement,” Tafanell says. The key, according to him, is to do “a little bit every day, to maintain discipline throughout your life.

The five objectives for collective empowerment

1. Reduce debt. “Today, with the economic situation we have, if you are young, you have to study and work, and save. In cities like Barcelona, paying rent is practically impossible. This must change, it is clear. A universal income? In a country like ours, although we would like it, we have to forget about it,” admits our chief financial officer. And he reminds us that “Spain is a country with a high deficit”. “If collective economic independence is to maintain the expenses and income of a country, we cannot get into debt. And in Spain, indebtedness grows and grows, everything goes to pay interest,” he explains.
2. Solidarity means paying taxes. For that reason, it is essential, according to Tafanell, “to be very supportive”. “That means that no one works under the table and that everyone pays taxes,” he summarizes. On a large scale, it means avoiding tax evasion and tax havens. “It’s unsupportive, and all it makes is sinking the country’s collective economy.” In fact, the more people pay taxes, Tafanell explains, the less taxes we will have to pay. 
3. Continue to educate the world. “There is too much capital that does not pay money. This has to stop,” he says, and the comment inevitably leads him to talk about the business culture of Mediterranean countries, which he sums up with the saying: “The law is made, the trap is made”. “It can’t be that the first thing we think about is how to sneak around, how to make the most of the system. Everyone makes a thousand and one tricks,” says our CFO with his gentle demeanor. Picaresque, he says, means that the unemployment rate has reached 25%, as it has during the pandemic, and there is no revolt. For this reason, he considers the reflection and debate that the 11Onze community proposes in La Plaza to be essential. “And from here, to continue educating. We can help, for sure. That is why we have created a financial community,” he says. 
4. Rebuilding the economic network. Precisely, the community that 11Onze is patiently building is the key to rebuilding a Catalan economic network that, Tafanell confesses, “practically no longer exists”. “In Catalonia we were very proud to be a country of entrepreneurs, but the second and third generations of managers sold all the successful companies to multinationals, who don’t care whether the headquarters are in Catalonia or Mozambique,” laments the financial director. Moreover, instead of investing the money from these sales in innovation and development, it has gone into real estate and speculation. 
5. Defining our community. The last objective for achieving economic independence is, therefore, to define very clearly what our community is. “If it is only the territory of Catalonia, and we do not have to drag the deficit of the whole of Spain along with us, the power we have to build ourselves economically is impressive,” he says. And he concludes: “The independence of Catalonia is a dream, yes, but I believe it is achievable. We have to prepare people for when it is possible. How? Less words. We have to take to the streets”.

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The new draft National Security Law opens up the possibility that the Spanish government can seize citizens’ money and assets in the event of an economic crisis, but can this and other state laws condition savings in European accounts? We are speaking to Aina Ansó, from 11Onze’s legal department.

One of the distinguishing features of El Canut is the possibility of opening and managing accounts with a European IBAN, not just Spanish. This function gives people control over their savings and offers a wide range of possibilities that can favour the day-to-day management of bank accounts, but also the security and liquidity of savings. Aina Ansó, from the legal department of 11Onze, gives us the keys to understanding how having bank accounts in European countries affects us.

Our savings, out of Spain’s reach?

The first question to be answered is whether having an account abroad means that it is out of Spain’s reach. Ansó explains that, effectively, “it does mean that it is outside the reach of the State in the tax sphere, as long as the amount of this account does not exceed 50,000 euros”. Above this figure, it will be necessary to account for the taxation of money located outside Spain.

“In this case, the Tax Agency must be informed by filing form 720. Likewise, if foreign transactions exceed one million euros, the Bank of Spain must also be informed by means of the Foreign Transactions Survey. This applies to both individuals and entities resident in Spain,” explains Ansó. In order to manage our assets properly and dispel any doubts, she also recommends seeking advice. In any case, whether the 50,000 euros are exceeded or not, citizens will continue to file their tax returns to the country where they are fiscally resident.

In search of European protection

The debate about the protection of our savings is complex, and the key to this issue lies in who has the power. In this sense, Spanish citizens are increasingly concerned about the draft bill approved by the Council of Ministers on 22 June, which reforms Law 36/2015 of September 28 about National Security.

“The initial objective, as it had to be done since 2016, was to specify what resources the Spanish government can use in a situation of national security interest. In other words, what specific intervention the state can carry out in the event of a crisis, be understood as a situation that compromises the country’s security”. An intervention that, as Ansó points out, cannot yet be firmly established: “In order to know whether a European account can finally be seized, we will have to wait for the definitive text, although, given all precedents, the final wording could be so ambiguous that we will not be able to know its real scope”.

However, in statements to 11Onze, the lawyer Arcadi Sala-Planell dares to predict that “this law would not apply if the client has the money in a foreign bank, because Spain has no powers outside its territory, and this is a state law. Therefore, to intervene the central bank [of another country] it would have to be a European law”. “It would be a scandal,” he adds.

Control of our savings

Given the draft bill, it is clear that having our money outside Spain can give us more protection on our savings, but why does it protect us more? What differentiates Spain from other European countries? Ansó points out that “if we take into account how other European Union countries operate in relation to national security issues, it is true that most of these countries demand rigorous parliamentary control, whereas in Spain’s case it is only the National Security Council that is going to decide”.

Incidentally, a Security Council made up by the president of the government, the vice-president, some ministers and other authorities, such as the chief of the Defence Staff, the Secretary of state for security, the Director of the National Intelligence Centre, the Director of the Cabinet of the Presidency of the Government and the Secretary of state for foreign affairs, according to the draft bill to which El País had access.

Covered by European legislation

Fintech money protection system is governed by Directive 2015/2366 of the European Parliament and Council from November 25, 2015 on payment services in the internal market. This regulation, says Ansó, “requires customer funds to be separated from the e-money company and deposited in a separate account at a credit institution”.

However, as the legal expert points out, “this money could also be used to invest in safe, liquid and low-risk assets”. “But one must bear in mind that the e-money company is obliged to take out an insurance, or some other comparable guarantee, to cover the amount equivalent to the funds, in case the e-money company goes bankrupt,” she adds.

This European directive, in fact, is in line with the legislation that credit entities must comply with to insure up to 100,000 euros per deposit, a fact which seeks legal guarantees for customers in relation to their savings.

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The 11Onze super app will allow users to open accounts in other European countries, a fast and functional operation that brings multiple benefits. Why is it important to choose which country we keep our money in?

For years, Europe has been seeking to build a common market, including euro payments. It has finally succeeded in doing so thanks to the creation of SEPA, the Single Euro Payments Area, and of the IBAN, the International Bank Account Number. These two systems make it possible for citizens to make payments, transfers and direct debits from any country in the European Union (EU), regardless of the country of origin of your current account. That’s why at 11Onze we want our community to be able to choose where they open their accounts.

Another reason why we believe it is important for our users to be able to choose the IBAN is undoubtedly related to the security of their savings. Specifically, in Spain, the Fondo de Garantía de Depósitos de Entidades de Crédito protects up to 100,000 euros per customer. But it is necessary to go further to check whether, in case of need, all customers could really recover that money.

How a country’s solvency is calculated when it comes to protecting customers’ deposits is difficult to explain. Therefore, we summarize it in one key idea: who guarantees our money is the central bank of our IBAN’s country. So, for example, if our money is in the Spanish State, the Bank of Spain must have on-hand enough cash reserves to, in case of an emergency, be able to cover all the current accounts in the country. 

In this regard, the European Central Bank collects data about European central banks’ solvency, i.e. those that offer the most protection in the event of failure of private banks. If the bank where my savings are deposited goes bankrupt, it is the central bank of that country that is liable, but nowadays, many of them are not sufficiently solvent to face such a situation. For this reason, the law obliges institutions to have supplementary insurance.

The index used by the European Central Bank for this classification, is similar to the so-called cash ratio, a formula that relates liquid reserves to deposits and is expressed as a percentage. If we look at the data in the graph below, which shows the common equity tier 1 ratio of credit institutions, Spain is well below the ranking headed by countries such as the Czech Republic, Luxembourg and Bulgaria, among others.

Seeking improvement in financial services

In addition to the existence of countries that are more solvent than Spain when opening a bank account, it is important to notice that, despite the fact that Spain is one of the countries that approved the PSD rules -in 2007; then signed the SEPA rules in 2012; and, in 2014, the agreements that initiated the use of the IBAN-, in practice, apart from failing to comply with the agreements it signs, its banking institutions have not improved the financial services they offer to customers either. For all these reasons, looking for alternatives is a good solution.

Moreover, since 2014, Spanish companies and institutions have practised what is known as IBAN discrimination, which consists of not accepting payments or direct debits to accounts that do not include the letters ES in their numbering, i.e. that do not correspond to a Spanish bank. By doing so, they contravene European regulations. This practice is not legal and only benefits traditional Spanish banks.

How to report IBAN discrimination?

Shortly after this discriminatory practice – especially widespread in Spain, but also in France – was detected, the first complaints were filed by customers. But, above all, it was the new emerging banking sector in Europe, led by neobanks and fintechs, born as an alternative to traditional banking, that led the action. Companies such as Revolut, N26, Finextra, Monito and Wise are examples of it. 

Some of these new banks, based in several European countries and, therefore, with a foreign IBAN, provide customers with tools to report it, in the first instance to the entity at fault and, if it does not rectify it, to the Bank of Spain. Ultimately, this can be escalated to European courts. Most of these lawsuits end up in favour of the people affected. The European Commission is well aware of this, as its pronouncements and reports prove, and punitive measures are being tabled. Some MEPs have even denounced it with formal questions at the European Parliament. 

Customers, new banks and European institutions are working to resolve IBAN discrimination to, once again, focus on the multiple advantages of free choice of IBAN, especially for customers. Overall, work is underway to ensure that IBAN discrimination becomes history in the near future.

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With a strong community, a shared structure and leading technology, operating worldwide with a single account can be a reality. 11Onze’s Head of Product, Jordi Sánchez, explains what has inspired us to change the world of banking.

Can you imagine that with a single gesture we could make transactions, apply for loans or move our savings around the globe? Experts of the new digital banking have been asking themselves the same question over and over again for months, and they have found the answer around a breakthrough concept: the universal bank account. They claim that if everyone had a single universal account, it would make the banking industry more efficient, and make life easier for customers. 

“There are many things in 11Onze that already resemble this universal bank account ideal,” says Sánchez. Currently, Spain is a paradigmatic example of how the banking sector tends to concentrate, with a few people controlling the whole market and therefore offering products at the price they want. On the other hand, inspired by this universal bank account, new banking institutions, using blockchain technology, can share information, services and structure. 

The 11Onze community is inspired by this utopia and has made of it its own work philosophy. “On the one hand, from the sector’s point of view, it helps reduces costs and makes the market more competitive. On the other hand, from the customer’s point of view, it allows everyone to have a basic account to operate more freely”, summarises our product manager. In short, 11Onze is building a banking experience that is unique in the world.

A single card for multiple transactions

So, if in the utopia of the universal bank account, a virtual number would be assigned to each client, a type of identification that would allow us to operate from anywhere on the planet, at 11Onze we also assign each person a code that will allow them, through Fem Cua, to download our top-level application, El Canut, and start operating. In addition, clients will have a single card to manage different transactions, a digital wallet that fully complies with the PSD2 (Payment Services Directive).

At the same time, 11Onze will take care of our entire community through a KYC (Know Your Customer) centre. These processes ensure that the financial institution strictly complies with a series of criteria to know, recognise and monitor all the current accounts it is responsible for. In La Plaça we have already explained how the 11Onze application will protect all customers thanks to the latest biometric recognition technology.

“Although a bank operation, such as a transfer or a loan application, does require a password to validate the operation, a uniform KYC saves the duplication of processes when the client registers or has to complete bureaucratic procedures because all financial entities will be sharing a database and will have a common procedure,” Sánchez adds.

The financial hub: a lot of offers for a fintech 

Lastly, and most importantly, this new-generation system, arrived to revolutionise traditional banking, will allow customers to choose where they want to open their universal bank account via the 11Onze access code. “At 11Onze, we concentrate a lot of IBAN offerings in a single fintech. This means that you can choose where to open your accounts among several European banks. We want to be a financial hub so that customers can operate with diversity and security,” says our product manager.

Like any leading fintech, 11Onze has created a shared network with other financial institutions which improves efficiency, shares strategies, technology and services, and reduces structural costs. At the same time, it helps customers to quit using multiple unrelated accounts, which obstruct free operations in the global marketplace. We are already the first fintech community in Catalonia. Get ready, now, to be the spearhead of all fintechs in the world. The world is changing. Money, too. It evolves with 11Onze.

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Are you still wondering what a fintech is, what distinguishes it from traditional banking, what’s the benefit for the client? We have compiled all the key information you need to understand how the banking of the future works.

In recent months, 11Onze Magazine has published several articles about fintechs and new banking trends. The universe around these concepts is complex, but La Plaça has managed to bring us closer to notions of economics that we didn’t even know existed. We have compiled the key concepts about the fintech world to remind you of the foundations on which the so-called banking of the future is built.

• Fintech

The concept is made up of two key nouns: finance and technology. The result of this union is materialised in financial institutions that, through mobile applications or online operations, allow you to manage your personal finances at the click of a button. The range of products that fintech can offer is equal to or greater than that of traditional banks, from current accounts, cards or transfers, to investment products or credit operations. 

• Technology at the service of people

In general, digitalisation seeks to facilitate the customer experience, and using artificial intelligence helps us to predict and organise personal finances. In the case of 11Onze, another equally important factor is added to this: empowering the user to offer them control of their finances, providing them with all the knowledge they need to make the decision that best suits their needs. 

• Flexibility and agility

These are two of the indispensable requirements for banking customers. And they are also two basic pillars of the customer experience for fintechs. Technology facilitates part of this work thanks to a methodology that makes it very easy to operate with.

• Personalised attention

But what if I am not proficient in new technologies, or if I need personalised advice? On this point, there is no uniform response from the sector, and it will be necessary to investigate what each entity offers in terms of user experience. In the case of 11Onze, our fintech goes beyond the screen to reach the user in the most personalised and approachable possible way. From chat to telephone support, customer service will be one-to-one. At 11Onze, we are going to set a rare precedent in the fintech sector. 

• A world of possibilities

Fintechs are breaking down territorial boundaries to offer a financial platform that is almost global in scope. In the case of Europe, several widespread systems are appearing, such as SEPA (the Single Euro Payments Area), which allows transfers, direct debits and card payments to be made quickly and easily in any member country. Today, having current accounts in other member countries does not affect citizens when carrying out their daily transactions or contracts, as fintechs allow them to do so securely and by a single click.

• Values and social commitment

It is a trend in almost all economic sectors: customer interest in companies with values is growing. Contributing to social development, being aware of and acting to curb environmental impact, or providing transparency on the destination of the income generated by a company, are some of the points that users value. The new banking system, the one that evolves from traditional banking, will have to take into account this commitment demanded by users If it wants to be the alternative and not limit itself to following in traditional banks’ footsteps.

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When we need to find financing, the first thing we think of is asking the bank for money. But there are other ways to get a loan. Often, due to a lack of knowledge, we do not use one of the tools that is closest to us: loans between individuals.

If the interest that the bank wants to charge you for a loan seems excessive, and you have already ruled out finance companies because, despite being faster, they are more expensive, there is another option: loans between individuals.

This form of community finance can be a good way for both the lender and the borrower to gain something. On the one hand, the lender gets a return for his money; on the other hand, the borrower gets an interest rate below the market rate.

A written contract is the key to avoid misunderstandings

The best way to avoid misunderstandings is to put the agreement in writing. In this private contract between the lender and the borrower, it is very important to put on record:

• Date and place of the signing of the contract. 
• Personal details of the parties involved (lender and borrower).
• The amount being lent.
• The repayment period. 
• The interest on the loan.
• The settlement of the instalments (monthly, quarterly, annual, at maturity…).

Once the contract between the lender and the borrower has been signed, the agreement must be registered and, therefore, the borrower must pay the ITP tax (Impost sobre Transmissions Patrimonials i Actes Jurídics Documentats) at the tax office of the Tax Agency of Catalonia, by filing form 600 within a maximum period of one month. If the loan is between a parent and a child or between two friends, no tax is payable, because loans between private individuals are taxable transactions, but exempt from taxation.

Although the lender does not have to pay this tax, the Personal Income Tax Act does state that, when a loan has been agreed between private individuals, the lender can be obliged to declare the interest. The legal interest rate is 3%. However,  when both parties agree, it is possible that this interest rate does not apply and therefore the lender does not have to pay tax on it. In the end, everything is left within the community.

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In August, after 52 years operating, Catalonia has abolished 556 kilometres of tolls, and the question now is: How do we pay for their maintenance? We are explaining to you how much has been collected by Catalan roads and how other European countries maintain their road networks.

From now on, the Spanish state will have to maintain most of the Catalan road network, which costs 60,000 euros per kilometre, some 33 million euros per year. How to do it has not an easy answer. Although tolls in Catalonia have produced extraordinary revenues, generating 537 million euros a year, they have benefited concessionaires and shareholders more than they had invested. On the other hand, it has financed 132 municipalities through the Property Tax (IBI). Despite this, Spain is at the bottom of European countries in terms of both investment and revenue collection. 

In fact, the Spanish state does not have a clear model for maintaining its roads, most of which are free for users, a fact that has left an 8 billion euro hole in the public coffers. To reverse this deficit, the Spanish government has proposed tolls on motorways and a Pay-As-You-Go system for high-capacity roads, as part of a post-covid recovery plan with European funds. 

Portugal, the mirror in which to reflect itself

Such a proposal is inspired by the Portuguese model, which has an additional charging system that includes motorways. In Portugal, as in Poland, vehicles must be registered and are charged by means of camera arches installed on the roads.

Another payment model is the one used in many Central European countries, such as Austria, Switzerland, the Czech Republic, Slovakia, Slovenia and Hungary, with the so-called vignette system, in which the driver pays a fixed price for driving on the roads. In the Austrian case, for example, it is 80 euros per year. Catalonia wanted to implement this model, but has finally agreed to share the same system as the entire Spanish road network.

France, in turn, has a mixed model similar to the one currently in place in Spain and, in a completely opposite way, Italy has almost all of its roads managed by private toll companies. On the other hand, in Germany, Belgium, the Netherlands and Denmark, the entire road network is free and financed by state budgets, with small exceptions, such as heavy goods vehicles, which must pay to circulate.

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The hegemony of the dollar as the reference currency in global trade and as an instrument of monetary liquidity have granted power and privilege to the US for decades, but in recent years there has been fear that a growing number of countries are managing to decouple their economies from dependence on the dollar. We analyse the reasons behind it.

August 15 marked 50 years since President Richard Nixon assembled his team at Camp David to announce that he was suspending the dollar convertibility into gold. It was the beginning of the end of the Bretton Woods Agreements and became effective the following year when Nixon formalized it as a permanent decision.

Until then, the dollar was a currency based on the existence of gold as a counterpart. From that moment on, it became a fiat currency, money placed on trust, with its value derived from the relationship between supply and demand and the stability of the issuing government. A value that, unlike the guaranteed currency, is based on people’s faith, and may lose its value due to inflation, or even become inoperative in case of hyperinflation.

This new monetary framework replaced the intrinsic value granted by the demand for gold, mainly from the jewellery sector, with the creation of the petrodollar system, ergo establishing the dollar as the oil transaction currency, which forced any country willing to buy oil, to convert its currency into dollars. Such a system creates a  dollar surplus that must be recycled and invested in the purchase of US government bonds and treasury bills, and consequently, creating an almost unlimited demand for the issuing country’s debt, a fact that allows the US to print large amounts of money without consequences. It is like a government black card.

Abusing a position of privilege

This demand for dollars gives the United States the possibility to assume perpetual debt because current account deficits are not a problem, due to its refinancing ease and confidence that investors will continue to buy assets that are considered safe. 

Moreover, US control of the International Monetary Fund (IMF) and the World Bank (WB), two bodies born out of the Bretton Woods Agreement, as well as of SWIFT (Society for Worldwide Interbank Financial Telecommunication), added to US petrodollar hegemony, confer them such a negotiating, intimidating and punitive power that is often used for their own economic interests and at the expense of the interests of other countries.

The widespread application of economic sanctions by American administrations, especially under Trump’s government, not only against countries considered enemies of US interests, but also against allied countries that refuse to obey orders coming from Washington, is causing many states to question US dollar hegemony and to take steps to create a multilateral financial system to shield their economies.

Russia and China de-dollarise

Over the past decade, Russia and China have initiated programs and signed de-dollarisation agreements to protect and shield their economies from US government and International Monetary Fund (IMF) sanctions. By 2020, less than half of bilateral trade transactions between these two countries were in dollars, and this year Russia has announced that all of its National Investment Funds will move away from dollar to euro or gold denominations.

It is not surprising that other countries such as Venezuela, Turkey, Pakistan or Iran be also in the process of de-dollarisation, but perhaps it was not so predictable that the European Union would sign similar trade agreements and promoted, like these countries, its own digital currency to diversify its options and reduce the risk of a possible paradigm shift.

The dollar is not in danger of losing its status as a global currency, but its supremacy as a trading currency, and as a bargaining tool, may be seriously eroded if the United States continues to abuse its position of power.

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On 24 August 2021, the government approved an initial pension reform that will bring some changes to retirement for all workers.

The sustainability of retirement pensions is a recurring and much-talked-about issue, and the Gobierno del Estado and its social agents have been working on reforming it for a long time, and have now approved the first package of measures.

In this initial block, the objectives are to guarantee the revaluation of pensions and the purchasing power of pensioners, as well as to lengthen the retirement age, providing incentives for workers to extend their working lives and penalising early retirement. We review the main measures that have been approved.

What are the main measures implemented?

• In order to guarantee their revaluation and the purchasing power of pensioners, pensions are linked to the CPI (Consumer Price Index) recorded in the previous year. Thus, they will be automatically increased from 1 January in line with inflation.
• Early retirements are penalised by increasing the reduction coefficients that calculate them. This reduction coefficient is increased, for example, from 16% to 21% for workers with less than 38 years and 6 months of contributions who wish to take early retirement by two years.
• Forced retirement clauses, which oblige workers to retire when they reach the legal retirement age, are eliminated and can only be maintained in agreements already signed and in activities where women represent less than 20% of the workforce.
• Incentives for workers who extend their retirement beyond the legal retirement age, consisting of a pension increase of 4% for each year of continued employment, an equivalent lump-sum payment, or a combination of the two options.
• Improving the financing system to ensure sustainability by establishing an annual transfer from the national budget to the social security system.

The second package of pending reforms

Thus, the short-term objective is to bring the retirement age in line with the real age, extending the working life of workers and, therefore, their years of contributions to the system. At the same time, the Gobierno del Estado is working on a labour reform that would provide greater stability, in which it would propose a reduction in temporary contracts, pursue subcontracting and recover collective agreements, among other measures to be applied.

Likewise, some other measures envisaged in the draft bill have been left out, such as the postponement of the retirement age to 67, the increase in the number of years of calculation that form the regulatory base of the pension, or the reform of maximum pensions. However, it is expected that the government will look into approving these measures in the future and possible new changes.

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