Tuesday

19th Feb 2019

Economic crisis could cause generational conflict

  • The commission's response represents the first longterm look at the problems associated with Europe's ageing population (Photo: European Commission)

The current economic crisis could sharply worsen the problems associated with Europe's ageing population and cause friction between younger and older generations if long term structural changes are not undertaken, the European Commission has warned.

In its 2009 Ageing Report, published Wednesday (29 April), the commission said that the economic downturn "could make the challenges creating by ageing more acute."

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

The report says that EU policy makers have a 10 year window – roughly the length of time left before the baby-boom generation starts to retire – to implement reforms to the health, pension and education systems. After the next decade, labour forces are predicted to no longer keep increasing.

No action will mean that the demographic changes ahead will change societies "considerably" and affect "intergenerational solidarity" and create "new demands on future generations."

The EU's current population of about 500 million people is expected to be roughly the same in 2060 but significantly older. "From 2015 deaths will outnumber births and the over 65 are set to increase to 30% of the population in 2060 from 17% in 2008. The 80+ would nearly treble to 12% of the total."

In 50 years time, the EU is expected to move from having now four working-age people (15-64yrs) for every person over 65 to a ratio of only two to one in 2060.

This will massively affect the pension systems as a decrease in the number of workers paying into the system means pension contributions have to rise or the state has to cough up.

"The fiscal impact of ageing is projected to be substantial in almost all member states," says the report. It predicts that spending on pensions, healthcare and longterm care will increase by 4.75 percentage points of GDP by 2060 in the EU as a whole and by 5 percentage points in the eurozone.

The report divides member states into three groups. Those where age-related public spending is highest at 7 percentage points of GDP including the Netherlands, Spain and Ireland. Countries such as the UK, Germany and Belgium belong to the next swathe where spending is predicted at 4-7 percentage points.

A final ten countries (including France, Sweden, Italy and Poland) will see the least increase in age-related spending at 4 percent points or less. The differences are due to variations in birthrates as well as health and pension systems.

The commission predicts that "annual GDP growth rate" will "decline significantly in the future with a smaller working age population acting as a "drag on growth and on per capita income."

To boost productivity, it recommends member states to do more to keep older people in the workplace longer, increase the share of employed women and take steps to lower the rates of early school-leavers.

This has spin-off implications for such things as child care, with improved facilities allowing more women to return to work or encouraging more couples to have children in the first place.

Solidarity

The commission's response represents the first longterm look at the impact of the crisis, with most of the focus to date on the short term impact on employment rates, GDP and budget deficits.

The study's release coincides with the first European Day of Solidarity. A poll on the issue showed that only 14 percent of EU citizens consider old people to be a burden to society.

However, 52% of Europeans fear that people in employment will be increasingly reluctant to pay taxes and social contributions to support older people, with the Portuguese and the Maltese being the most pessimistic in this respect and the Swedish and the Danes the most optimistic.

AGE, the European Older People's Platform, agrees that Europe's demography is "beginning to create tensions" between the generations, but that seeing the problem purely through a financial lens was not enough.

"The way in which our society is organised must be reviewed completely in order to rebuild the social fabric and the links between and within the different generations," it said in a statement.

EU to propose scrapping summer time change

Based on the preliminary results of an online survey in which mostly Germans took part, the EU executive is proposing that the whole EU stops changing times in March and October.

Investigation

How to get around the EU posted workers directive

Some EU careworkers in Belgium receive around €400 a month - despite their carers paying €2,500 a month and paying for flights and accommodation. The answer lies in how firms can skirt the safeguards in the EU's posted workers directive.

Feature

Resetting the gender balance through football

Many sports, like football, have been so heavily male-dominated at every level that women and girls have battled against poor odds to be treated as equals in the game. FIFA aims to change that.

News in Brief

  1. Visegrad countries meeting with Israel called off
  2. EU ministers call climate change 'direct and existential threat'
  3. Seven MPs leave Britain's Labour Party
  4. Czech PM: May's EU elections 'most important ever'
  5. 'History will judge us': May tells MPs on Brexit
  6. Trump warns EU on release of Islamist fighters
  7. Venezuela expels 'conspiratorial' MEPs
  8. Holocaust dispute upsets Israel's EU lobbying

Stakeholder

A touch of football at this year's G20 summit

FIFA president Gianni Infantino addressed the G20 leaders and placed football at their disposal as a powerful tool to help them address the challenges facing the world today.

Stakeholders' Highlights

  1. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID
  2. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership
  3. Intercultural Dialogue PlatformRoundtable: Muslim Heresy and the Politics of Human Rights, Dr. Matthew J. Nelson
  4. Platform for Peace and JusticeTurkey suffering from the lack of the rule of law
  5. UNESDASoft Drinks Europe welcomes Tim Brett as its new president
  6. Nordic Council of MinistersNordic ministers take the lead in combatting climate change
  7. Counter BalanceEuropean Parliament takes incoherent steps on climate in future EU investments
  8. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  9. Nordic Council of MinistersSeminar on disability and user involvement
  10. Nordic Council of MinistersInternational appetite for Nordic food policies
  11. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  12. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups

Latest News

  1. EU should clarify rules for plant burgers and lab meat
  2. Italian populists could be second biggest force in EU parliament
  3. Merkel defends Russia ties, ridicules Trump on cars
  4. British MPs condemn Facebook CEO's misrule
  5. EU's chance to step up on Hungary and Poland
  6. ESA pushback against new EU space agency plan
  7. Sluggish procedure against Hungary back on table
  8. Could Finnish presidency fix labour-chain abuse?

Stakeholders' Highlights

  1. Nordic Council of MinistersTheresa May: “We will not be turning our backs on the Nordic region”
  2. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  3. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  4. Nordic Council of MinistersState of the Nordic Region presented in Brussels
  5. Nordic Council of MinistersThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  6. Nordic Council of MinistersThe Nordic gender effect goes international
  7. Nordic Council of MinistersPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  8. Nordic Council of MinistersNordic design sets the stage at COP24, running a competition for sustainable chairs
  9. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  10. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  11. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  12. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs

Join EUobserver

Support quality EU news

Join us