The pensions systems of the enlarged Europe are gradually adapting their individual features to the requirements imposed by population ageing in a situation in which their financial sustainability is coming under ever increasing pressure. One of the main means by which this objective can be attained is the raising of the retirement age. In this regard almost all the recent pension reforms reflect the will to increase incentives for postponing retirement and for encouraging working lives to continue to an older age.
Using the Italian case as a learning example, this short note will discuss the issues raised by the goal of working life prolongment. Firstly, it will be argued that such a goal is of paramount relevance vis-à-vis the increase in life expectancy as a way-out from the apparent trade-off between financial sustainability and social adequacy of pensions systems. The difficulties of fulfilling such a goal, taking account of the interactions between demand and supply factors and of the inheritance of past rules and habits, will then be discussed with reference to the Italian case.
1. The welfare state in 20 years — an attempted look into the future
by Jaroslaw Pietras Ph.D.
Minister for European Affairs, Poland
In today’s debate on a need for socio-economic transformations in Europe, one can frequently encounter an opinion that the welfare state, as we know it from the 20th century, sinks into oblivion. Ageing of the societies, high unemployment rate, low social activity and inefficiency of taxation and insurance systems preclude maintenance of high levels of social transfers. Without a radical reform of the foundations of the European social model, many of the European states can be threatened by bankruptcy. One can certainly ask a question — what shall come in exchange? Are we in time perspective of the coming 20 years to see a return of the late 19th century social model, where the assistance to the poor was founded on a charity and persons who — for various reasons — were unable to compete against others could solely count on support from their families? If it were so to happen, this would signify a return to a system that faced criticism not only from the most eminent philosophers or ethicists but also a vast majority of economists.
The future welfare scenario in the European Union is taking place after the European Union’s recent enlargement to 10 new member states. It is a welcome debate, which deals with welfare issues in the context of labour and medical research.
This event enhances the historical role of Trieste as a reference point for finance and insurance in what is known as Mitteleuropa.
The Challenge of Increasing Life Spans for Employment and Pension Schemes: An Open Letter to All Those Who Are, or Will Be, 65
Dear Madam, Dear Sir,
May I draw to your attention an issue that is constantly being talked about in the press, is on the lips of almost every politician and economist, something that you have probably had occasion to discuss even with your next-door neighbour: namely, that population ageing in industrialized countries, and in the long run in all other countries as well, is one of the major problems of our time.
Not true, I am afraid. Believing this is akin to attempting to drive a car with your eyes glued to the rear-view mirror.