Spain to raise minimum wage by 8 percent in 2017

Spain's minority conservative government on Friday approved raising the country's minimum monthly wage by 8.0 percent in 2017 to €825.5 ($876) as demanded by the main opposition Socialists.

Spain to raise minimum wage by 8 percent in 2017
Photo: Images Money/Flickr

Finance Minister Cristobal Montoro said the rise – approved at a weekly cabinet meeting – was “negotiated with other political groups”.

The minimum wage will rise from €764.4 to €825.5, an increase of €61.1.

That is higher than the monthly minimum wage of 618 euros in neighbouring Portugal but far lower than the minimum wage of €1,467 in France.    

Prime Minister Mariano Rajoy was sworn in for a second term last month but this time around his Popular Party lacks a majority in parliament and needs to scrabble for approval from other opposition parties further to the left to win approval in parliament for legislation.

The Socialists had demanded a rise in the minimum wage to back the government's budget for 2017, which will need to include measures to reduce public deficit targets agreed with the European Union.

“We secured from the government a rise (in the minimum wage) of eight percent,” Socialist party spokesman Rafael Hernando told reporters, adding “this increase is the largest in 30 years”.

Hernando said the rise was an “indispensible condition” for the party's support for the 2017 budget.

Spain has agreed with Brussels to reduce its budget shortfall to 3.1 percent in 2017 from 4.6 percent this year.    

Spain's two biggest unions, the UGT and CCOO, welcomed the increase but said it was “insufficient”.

Over 5.5 million Spaniards earn the monthly minimum wage, or an even lower salary, and “struggle to make ends meet”, they said in a joint statement.

The two unions will stage two days of protests across Spain on December 15th and 18th to pressure the government to drop its austerity policies and “respond to social needs”.

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Why banks in Spain are obliged by law to offer a low-cost basic account

Low-cost basic accounts may not be widely advertised in Spain, but they are available and your bank must, by law, offer you one if you want.

Why banks in Spain are obliged by law to offer a low-cost basic account

According to EU law, banks must offer a “basic account” for essential operations such as depositing and withdrawing money, making transfers and receiving salaries.

The EU created this “basic account” with the aim of avoiding financial exclusion and providing everyone residing in the bloc with a current account, even if they hardly earn any money or don’t have a fixed address.

READ ALSO: What’s the maximum amount you should have in a current bank account in Spain?

What are these basic accounts?

They allow you to carry out up to 120 operations per year and have a debit card, paying only a commission of €3 per month or €36 per year to use it. 

The Bank of Spain along with consumer associations are encouraging banks in Spain to make these types of accounts more well-known to their customers. 

READ ALSO: What to be aware of before opening a shared bank account in Spain

Who are these basic accounts for? 

The accounts are ideal for those who have minimal incomes, as well as those who are not comfortable with technology such as using computers, tablets or smartphones as they don’t require you to use any apps or carry out any extra operations online. 

They are also good for vulnerable consumers, due to the fact that banks must agree to give you the account free of charge for two years, extendable two by two, provided you demonstrate that you continue to be so.

You will be considered vulnerable if: 

  • You are not part of a family unit and you do not earn more than twice the amount of the IPREM. For 2023, this will be €14,400 per year.
  • Or, if you are part of a family unit of fewer than four members and you earn less than 2.5 times the IPREM – no more than €18,000 in 2023.
  • And if none of the members of the family own property, except for the main residence, or own a company. 

Can banks refuse to give me a basic account? 

Not really, no. Banks are obliged by law to be able to provide these low-cost accounts and can’t refuse you unless they find out that you are using it to launder money or threaten national security.