Defusing the pension time bomb. Increasing employment rates – a key policy measure for maintaining sustainable pensions in Europe

Article abstract:

Demographic changes and pressure on public finances are the main driving forces for reforms of welfare and pension systems in Europe. There are high-pitched calls - particularly from countries such as Austria, Italy, France, Germany and the United Kingdom - for attention to be re-focused on basic facts, arguments and interests. Reforming pension systems is one of the priorities of the current Italian Presidency. This article seeks to provide an introduction to the debate currently taking place in numerous current and future EU Member States. After a description of the main financing methods of pension systems, the role of the EU institutions in the pension reform process will be analysed. Further on, some light will be thrown on the need to reconsider the financial, social and employment implications of pension systems in Europe. Particular attention is given to the work-retirement process, i.e. the initiative to boost employment rates in order to increase contributions to social protection systems and to reduce public expenditure.