On Thursday, the Spanish government and the main labor unions reached an agreement that will raise the retirement age to 67. The reform is part of Spanish plans to reduce pension costs and strengthen the economy. Workers who have paid into the pension system for over 38 years will be able to retire at 65. The reforms will go into effect in 2013, with the retirement age increasing gradually. The Cabinet is expected to approve the bill on Friday, and its passage through Parliament is expected to be uncontentious due to union support. The Spanish government is also cutting wages and spending in an effort to strengthen the economy.