EUROPEAN PAPERS ON THE NEW WELFARE

Active Ageing: the EU Policy Response to the Challenge of Population Ageing

Abstract

This paper considers the active ageing strategy as the EU policy response to the challenges posed by population and work force ageing. Active ageing is a new supranational policy design started in 1999 that seeks to achieve greater correspondence between and, possibly, harmonization of the member states public policies towards older workers at EU level. In the framework of this new policy design, the EU has set itself two important targets to be met by 2010: first to increase the employment rate of older workers to 50% (Stockholm target-2001) and second, to delay by five years the age at which older workers stop working (Barcelona target-2002). So far the progress towards meeting the Stockholm and Barcelona targets is mixed and without determination both at EU level and especially by the Member States these objectives will be out of reach by 2010. The modest result produced so far by these policies reveal the weakness of the current policy approach at national and EU level.
The general weakness of the EU ‘active ageing’ policy is that ‘ageing’ is approached only as a challenge. But ageing is also an opportunity to be seized and one of the ‘humanity’s greatest triumphs’ (WHO, 2002). Thus, the paper questions the ‘mentality crisis’ of the EU where a welcome process of demographic change leading to ageing has been transformed into crisis of the welfare state. Therefore, these weaknesses of the EU approach call for the rethinking and the renewing of the EU policy on the active ageing along new policy and legal lines. To succeed, a new strategy has to be formulated based on a multidimensional policy approach on ‘active ageing’ which change outdated paradigms, remove a number of older workers related-myths and convert the process of population and workforce ageing into an opportunity for society and older workers themselves.

1. Introduction

Population ageing is one of the most important challenges facing the EU countries. The new entrants of the 2004 and 2007 enlargements as well the other candidate countries only accentuate the current demographic trends of the EU. Over the next 50 years, the EU countries will experience one of the most pronounced ageing trends (OECD, 2006; COM, 2002). Population ageing poses two challenges to the Member States: firstly, it will put enormous pressure on the financing of the social protection systems, which may threaten their sustainability and secondly, it will have the consequence of shrinking the workforce — which may reduce growth in the living standards.
To meet these challenges, the EU has devised a new policy approach, the ‘active ageing’ policy, which — as of 1999 — has become, a major policy concern at EU level and in most EU member states. The promotion of active ageing is reflected in two complementary targets that the EU has set itself: the 2001 Stockholm European Council agreed that half of the EU population aged 55-64 should be employed by 2010 and the 2002 Barcelona European Council concluded that “a progressive increase of about five years in the effective average age at which people stop working in the European Union should be sought by 2010”.
Therefore this paper will trace the development of the active ageing policy from the EU perspective and the policy issues that are raised by the societal ageing. The active ageing policies of the EU Member States are also included in the discussion when and where relevant. The research involves a literature review.
The paper in section 2 explores the main challenges the EU is facing due to the workforce ageing over the next 50 years. Subsequently, Section 3 examines the different instrument mobilized by the EU to respond to these challenges. Section 4 gives an in-depth analysis of the Stockholm and Barcelona targets. Section 5 makes an assessment of the results produced by the EU existing policies on the active ageing. It is argued that the countries are clearly in different position as regards the meeting of Stockholm and Barcelona targets and most of them have a long way to go to meet them. Section 6 makes a critical assessment of the current EU approach on active ageing. It is argued (Subsection 6.1) that even though the responsibility for the slow progress to deliver the Stockholm and Barcelona targets lies with the member states, still the EU approach has some weaknesses which call for the EU to rethink its current strategy. The major weakness of the EU ‘active ageing’ policy is that ‘ageing’ is approached only as a challenge, and as such the current EU approach makes the older workers a special group for whom special solutions need to be proposed. This approach is questionable in so far as it might stigmatise them and send ‘wrong messages’ that contribute to reinforce the existing attitude and negative perception of employers towards the older workers’ capabilities. Subsection 6.2 reveals another important weakness of the EU approach. It is argued that the EU reform on pensions is a parametric rather than a paradigmatic-style of reform, that is, the EU pensions reform tries to downsize the PAYG pillar by raising the retirement ages, but making mandatory retirement ages (MR) possible. The paper questions the argument to continue to allow MR, given that first, it denies the older workers equal protection and treatment by law, second, is based on economic fallacies, third, it is outdated in a society where people live longer and fourth, is overwhelmingly rejected by public opinion worldwide. Subsection 6.3 then, analyses the limits of the EU law on age discrimination. It is argued that the EU law on age-discrimination in employment is a half-hearted approach which does not send strong signals to employers to change the attitudes towards the older workers. First, the provisions of the EU anti-discrimination legal framework are very vague and great legal uncertainty surrounds many of the issues covered, and second, the law has too many exemptions which “tend to discredit the anti-discrimination laws” (Hornstein, 2001). What is more important, it makes it difficult for the victims of such discrimination to lodge claim for direct or indirect discrimination.
In the light of these shortfalls and limits the paper suggests that the current political and legal framework needs to be revised and updated. Section 7 sets out some new policy directions for a renewed strategy on active ageing which tries to connect the ‘removal of mandatory retirement’ at EU level, the ‘improvement of the EU law on age discrimination’, and the ‘promotion of gradual retirement and part-time work for older workers.
Section 8 concludes that, population ageing is both a challenge to be met and an opportunity to be seized. It is a challenge because it will put upward pressure on the public expenditure while dragging down economic growth. But it is also a tremendous opportunity for all of us to spend more rewarding years at work and in retirement. Seizing this opportunity will require new strategic thinking (by the academic and policy-making world) and cooperation of all the stakeholders (government, employer’s organizations, trade unions, and civil society) to adopt a new strategy of age-friendly employment policies and practices.


Dede Kaneci: PhD Student, IUIES (International University Institute of European Studies, University of Trieste, Gorizia branch)


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