EUROPEAN PAPERS ON THE NEW WELFARE

Abstract

Governments increasingly encounter opposition to the controversial welfare and labour market reforms that appear necessary for addressing the challenges of demographic ageing. The reasons for such failures reside principally in their impact on acquired rights but also in the top-down and fragmented approach adopted by most governments. Lessons from successful reforms indicate that a broad policy mix is indispensable together with a broad public debate and consensus building with the social partners on the objectives of the reforms and the means to implement them.
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1. Introduction

The paper aims to give an answer to the question to which extent the Lisbon agenda goals are relevant for the countries of South Eastern Europe (SEE) during the EU accession process and how they relate to the Copenhagen criteria for the European Union membership¹. It tries to evaluate the position of Croatia in relation to the Lisbon goals. The initial Lisbon Strategy has not been a success due to the lack of political leadership, commitment and ownership on the part of member states, but also due to bad governance and lack of prioritisation.
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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.
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1. Introduction

In December 2005 our working group was asked by the European Commission (DG Employment and Social Affairs) to conduct a research project on the effects of ageing on consumption and social expenditure.
The analysis of the effects of ageing on consumption patterns, as well as the effects on the provision of public goods and services, have been widely addressed by both theoretical and empirical literature, we are not aiming, with this work, at providing advancements of the literature, on the contrary, we will build on it to obtain a user friendly and fairly complete model providing consistent answers to policymakers.
The job was planned accordingly, and divided into different steps: first an analysis of Eurostat demographic projection; second the estimation of consumption-age profiles; third the parameterization and radical extension of our already existing projection model, in order to allow for consumption projections; and, finally the running of projections and the analysis of results.
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1. Introduction

The phenomenon of population ageing will have profound consequences for governments and societies all over the world, and not just for pension systems. Capital flows are likely to shift dramatically, as older societies sell their assets to younger ones to finance consumption in retirement. Worldwide immigration flows may accelerate, as older, developed nations become more dependent on workers from abroad to perform jobs that cannot be filled with domestic employees alone. The balance of geopolitical power may also shift over time, as emerging and younger powers become more dominant economically, allowing them to demand a greater say in world political affairs.
But it cannot be denied that the implications of population ageing are seen first and most clearly in the long-term projections of state-based pension systems. In a sense, actuarial projections of pension systems were, and are, canaries in the coal mine, providing advance warning of the coming demographic shift that will fundamentally alter the political and economic landscape.
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The Lenghtening of the Life-Cycle appears more and more to be a decisive, even revolutionary event of our times. It is spreading worldwide and it concerns the economic development as well as society at large.
The European Papers on the New Welfare are dedicated to better understand this phenomenon and to stimulate discussion on adequate solutions, in particular with reference to the ‘counter-ageing society’, the ‘rejuvenation’ (svecchiamento) of the elder and their active participation in and contribution to the every day life. Let us point out a few key reference points:
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