Brussels, 28/04/2009 (Agence Europe) - On Wednesday 29 April, the European Commission will adopt a communication and a report on the challenge of an ageing population against a background of economic and financial crisis. The economic, budgetary and social challenges related to the ageing of the European population have been assessed several times in the past, but the current recession coincides with the first cohort of baby boomers reaching retirement age, and the effects of this demographic shift are beginning to make themselves felt. There is a window of opportunity of around 10 years for the adoption of the necessary reforms to meet these challenges, but the current economic situation must not lead to inaction, the Commission says. Europe cannot allow itself a “lost decade”, the cost of which could reach 10% of per capita GDP by 2020, would see public debt mushroom and compromise how its adapts to the needs of an ageing society, the communication adds.
Similar challenges but different situations from one member state to another. By 2060, the population of the EU is expected to be roughly the same size as today, but it will be much older. The ratio of four people of working age (between 15 and 64) to one of retirement age (65 and over) will become two to one. Productivity will be the main factor in economic growth, the potential level of which will fall sharply within the EU, with major differences between countries. At the same time, the cost of transfers and services for the ageing population will increase significantly for member states' public purses. The budgetary impact of the ageing population will be seen in the course of the coming decade and is likely to come to 4.75 additional percentage points of GDP in the EU by 2060 and more than 5 percentage points in the euro area. Here, too, some member states will be more affected than others. Nine member states (Luxembourg, Greece, Slovenia, Cyprus, Malta, Romania, Spain, Ireland and Belgium) will see a rise of more than 7 percentage points in public spending related to ageing, eight others (Netherlands, Finland, Czech Republic, Lithuania, Slovakia, United Kingdom, Germany and Hungary) will see a rise of between four and seven percentage points and the remaining 10 (Bulgaria, Sweden, Portugal, Austria, France, Denmark, Italy, Latvia, Estonia and Poland) will see rises of four percentage points or less. Reforms already carried out in the area of retirement pensions, health systems and long-term healthcare have helped reduce pressure.
Priorities remain unchanged in crisis. With the crisis, the first priority has to be putting in place policies that take the EU permanently into low growth in jobs and productivity. The objectives set by the European Council in Stockholm in 2001 (- rapidly reducing debt; - increasing employment and productivity levels; - reforming pensions, health and long-term care systems) and those contained in the Commission communication of October 2006 (see EUROPE 9285: - promoting demographic renewal by improving conditions for families; promoting employment and increasing the length of working lives of better quality; - making Europe more productive and dynamic; - receiving and integrating migrants into Europe; - ensuring sustainable public finances) remain just as relevant today. “The damage caused by the economic crisis to public finances makes it all the more important to bear in mind the longer term needs of the EU and to strengthen the structural reform agenda aimed at tackling the demographic challenge,” the communication states. The current situation must, then, be viewed as a “time for social innovation”, inspired by the successes and reforms already carried out in member states.
Renewed determination in several areas. Action and coordination are necessary, the communication says, and it puts forward a roadmap listing the Commission's next steps in: - retirement pensions, health systems and long-term care. Along with member states, the Commission wants to continue to highlight efficiency of social spending as part the Stability and Growth Pact, the open method of communication and, more generally, the Lisbon Strategy (guidelines for the Strategy post-2010 will be published at the end of 2009). Several communications are also planned in 2009 (on the “Long-term Sustainability of Public Finances in the EU”, “Solidarity in Health: Reducing Health Inequalities in the EU”) and 2010 (on adequacy and sustainability of pensions in the context of
the social OMC, how to further develop universal, affordable, high-quality long-term care, as well as a new disability strategy following on from the current Disability Action Plan, etc.); Financial services and taxation. Improving the way the financial markets work is essential for supporting growth and jobs and protecting financial assets, including supplementary pension schemes and supplementary health insurance; - education, training and R&D. The Commission will seek to improve future skill needs in an effort to promote efficient and equitable education and training systems. A communication on assessing the efficiency of tertiary education systems in the Member States and policy measures to boost productivity is scheduled for 2010. This also applies to research and a communication to shape a renewed strategy for R&D and innovation post-2010. A proposal for a Council Recommendation on Neurodegenerative Diseases (including Alzheimer) is also planned, as well as a communication on the future of transport in a long-term perspective and a Roadmap towards a 2050 Energy Policy. A.B./trans/rt/rh