Monday

22nd Jan 2018

Brussels suggests raising retirement age for EU citizens

  • EU citizens should retire later, recommends Brussels (Photo: EUobserver)

The European Commission is suggesting that the retirement age in member states should be raised regularly so that on average across the EU not more than one third of adult life is spent in retirement.

According to a report in today's Financial Times Deutschland, citing a commission ideas paper on pensions, workers should work longer hours and retire later otherwise there risks a "painful combination of smaller payouts and higher contributions."

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The commission paper, to be presented before the summer, notes that the real retirement age in the European Union is an average of just over 60 years, lower than the average retirement age of industrialised countries belonging to the OECD, which is 63.5 for men and 62.3 for women.

It suggests that by 2060, Europeans will live on average seven years longer. This would mean extending working life to almost 70 years of age in order to maintain the balance of not spending more than a third of adult life (over 18 years) in retirement. This is four years and eights months longer than the 65 years that is the current target for EU member states.

While many member states are facing pressure funding pensions as the EU's population ages and lives longer, France faces the most difficulties.

According to FT Deutschland, men in France retire on average at 58.7 years, the lowest age in both the EU and the OECD.

French President Nicolas Sarkozy, who was elected on a reform ticket in 2009, has been hesitant to tackle pensions, an issue that has long brought French people to the streets and even contributed to the fall of a government in the 1990s.

But the global economic crisis has pushed several EU governments to undertake severe austerity measures and is forcing the French president's hand.

In a sign of the fight to come, around 400,000 demonstrators took to the streets across France on Thursday to protest at plans to raise the retirement age to 61 or 62 years.

The government is planning to finalise its pension reform plans in July, according to French papers, and put them before parliament in September.

Compounding the urgency of the need for reform, French people, while going into retirement comparatively early also have a life expectancy that is several years above the EU average.

More recently, meanwhile, the issue has caused tension between member states. At the height of a heated debate in Germany on whether to contribute to a fund to help bail out debt-ridden Greece, several German politicians took exception to the fact that the average retirement age for Greeks is 61 and much younger for workers in several professions. Germany recently raised its retirement age from 65 to 67 years.

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