Rajoy playing politics with pensions, says Socialist Party opposition

With the government yet to send a clear message as to whether or not it plans to freeze pensions, thus cutting the purchasing power of Spain's 8.9 million pensioners, the opposition and labor unions warned on Sunday that Prime Minister Mariano Rajoy is waiting until after the October 21 Galician and Basque elections to announce his intentions.

"It makes you think that he isn't saying anything because they know they are not going to maintain pensioners' purchasing power," Socialist leader Alfredo Pérez Rubalcaba said during a party meeting in Asturias. "They are going to make the announcement on the 27th or 28th, as they did when they announced the cutbacks after the elections in Andalusia and Asturias."

According to the 2013 budget, which was presented to Congress last week, the social security fund, from which pensioners draw retirement benefits, does not have enough money to cover inflation adjustments next year - an additional 2.5 billion euros.

With Spain's borrowing costs rising, and public debt expected to increase due to the billions of euros Spain needs to recapitalize its banks, the hike in pensions could push the projected deficit figure this year -- 7.4 percent of GDP -- up two decimal points.

By law, November is the month when the government must revise pension figures for the following year.

"The government is avoiding making a public commitment so it can buy time to do the electoral arithmetic," said a CCOO labor union official.