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Pension crisis looms as over-65s to double by 2060

EU

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With people living longer and “persistently low” fertility rates across Europe, natural population growth would simply stop as of 2015 and, as of 2035, net migration flows would be insufficient to counterbalance the negative natural change, a report by the EU’s statistical office Eurostat predicts.

Based on current trends, today’s ratio of four working-age people per pensioner would be reduced to just two within the next fifty years, creating a real pensions “timebomb” on the continent, the report underlines.

The situation would be worst in Bulgaria, the Czech Republic, Latvia, Lithuania, Poland, Romania, Slovenia and Slovakia, where emigration means there could be as few as 1.5 working age people per pensioner. The blow would be softened slightly in countries like Denmark, Ireland, Cyprus, Luxembourg and the United Kingdom, where population growth is likely to be stronger, notably thanks to higher levels of immigration, which have bolstered workforces and fertility rates.

According to the forecasts, the UK would become the bloc’s largest member in terms of population, with 77 million inhabitants, compared to 61 million nowadays. Germany, which is currently the most populated EU nation, would see its population decline from 82 to 79 million by as early as 2035 and sink to just 70.7 million by 2060.

While expressing caution over the accuracy of these projections, the European Commission expressed concern regarding the burden that the ageing process will place on the economy and the budget. “We are concerned with finding out whether our member states will be able to pay for the costs linked to ageing,” said the Commission’s spokeswoman on economic affairs, presenting the report to journalists. According to her, ageing represents just as big a problem as the challenges of globalization and climate change, which will require governments to consolidate their public finances, raise employment rates and reform their pension, healthcare and long-term care systems.

Immigration could also provide solutions, as seen in the UK, but many European countries are skeptical about opening the doors to foreign workers. The EU “Pact on Immigration and Asylum” currently under discussion at EU level, under the auspices of the French Presidency, would indeed lay down strict common rules on immigration in a bid to stem ever-increasing migration flows towards the continent (EurAktiv)

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