The governor of the Bank of Spain, José Luis Escrivá, denounces that spending on temporary incapacity has skyrocketed post-pandemic to unprecedented levels in the European Union, and calls for better coordinated management between communities and Social Security.
The governor of the Bank of Spain, José Luis Escrivá, raised all alarms on Thursday regarding absenteeism in Spain. During the presentation of the 2025 Annual Report of the institution in Tenerife, Escrivá warned that sick leave, especially long-term leave, has surged since the pandemic, raising Social Security spending to levels "unparalleled" in the European Union. The diagnosis is clear: the current system for managing temporary incapacity has a "wide margin for improvement."
A problem of incentives between communities and Social Security
Escrivá focused on the current separation of competencies. Decisions regarding sick leave are made by the public health services of the autonomous communities, but the economic impact falls on Social Security. "This separation hinders the adoption of incentives that favour more efficient management," the governor pointed out.
During his time as Minister of Social Security, Escrivá promoted agreements with the communities to improve the management of temporary incapacity. However, in light of the spending evolution, he believes there is still much work to be done. Absenteeism also has a cyclical behaviour: it decreases when unemployment is high and increases when employment improves, as is happening now.
This week, the presidents of CEOE and Foment del Treball, Antonio Garamendi and Josep Sánchez Llibre, called for a major pact between administrations, businesses, and unions to curb absenteeism, which they estimate costs €33 billion annually. A bill that, according to business leaders, hampers the competitiveness of the Spanish economy.
"The separation between those who decide on sick leave and those who pay hinders incentives for more efficient management," stated José Luis Escrivá.
Productivity and employment: insufficient progress
Beyond absenteeism, Escrivá analysed the productivity of the Spanish economy, which is growing at a rate of 0.5% annually. Although it is approaching the European average, the governor warned that to achieve full convergence with the EU by 2050, it would be necessary to double that progress to 1% annually. An ambitious goal that requires structural reforms.
The Bank of Spain notes that the highest productivity growth in the last decade has been accompanied by an increase in employment greater than that of other European countries. However, the Spanish unemployment rate remains stagnant at around 10%, four points above the community average. This figure highlights that the Spanish labour market still has significant imbalances.
Escrivá attributed this persistence of unemployment to two factors: "insufficient and fragmented" active employment policies among autonomous communities, and the existence of certain subsidies that, in his opinion, may reduce incentives to return to work.
The subsidy for those over 52 under scrutiny
The governor of the Bank of Spain cited the subsidy for unemployed individuals over 52 years old as an example, which is maintained until retirement and contributes to Social Security at 125% of the base. Escrivá stated that this mechanism "may reduce incentives to re-enter the labour market," as those benefiting from it have "very low" activation rates.
However, he recalled that this benefit was designed in a context where the chances of finding employment for those over 52 were very limited, and its aim was to protect their future pensions. Now, with many sectors struggling to fill vacancies, Escrivá believes it is time to review whether this scheme remains "the most appropriate."
"The subsidy for those over 52, as currently designed, may reduce incentives to re-enter the labour market," Escrivá pointed out.
For workers and businesses, the message from the Bank of Spain is clear: the sick leave system needs urgent reform to align the incentives of all parties involved. Meanwhile, spending continues to grow and productivity advances at an insufficient pace to converge with Europe. The ball is now in the court of the Government and the autonomous communities, which must sit down to negotiate a new management model.
The complete report from the Bank of Spain will be available on its website starting this Friday, with data broken down by autonomous communities and sectors. Social agents have already announced that they will study it to prepare their proposals for the social dialogue table.
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