Spain will not stop plan to increase age of retirement

The Spanish government will not withdraw proposals to increase the working age to 67 from 65 despite planned protests by labour unions this week, Labour Minister Celestino Corbacho said on Sunday.

Corbacho said in an interview with daily El Pais the government would not be prepared to withdraw the proposal even if it saw a social response strongly against it.

Labour unions have planned demonstrations against the proposed change across the country starting on February 22.

"The government is not going to withdraw the proposal. It is necessary to have this debate," he said, adding that consensus would be sought.

Corbacho said the world was anxiously watching to see how Spain's social security reforms developed and it was necessary to begin debating an extension to the working age given the forecast increase in retired people over the next 25 years.

Spain has been fighting to assure markets that it is capable of meeting its target of bringing down its deficit to an EU guideline of 3% by 2013 from 11.4% in 2009.

Corbacho said he was not afraid of the once-strong relations with labour unions souring further over the proposals and repeating his call for dialogue on the matter.

In a separate interview with ABC newspaper, Ignacio Fernandez Toxo, head of Spain's largest labour union CCOO, repeated the group's stance.

"The government's proposal to push back the retirement age is unnecessary and unfair," Toxo said. He would not be pushed to say if the planned protests could escalate into the full-scale strikes seen in Greece against its government's planned austerity measures but said the union would defend what the "majority" of society wanted to see. Minister Corbacho also said the government wanted to stop firms, especially those that received government help, from letting people retire early.

"There is a cultural problem in this country. We need to get to a place where it's seen as bad to let people retire at say 54 years old," he said.

The government plans to hold three-way talks with labour unions and business groups in the coming weeks, aimed at tackling the country's close to 20% unemployment rate.