Tuesday, July 25, 2006

Europe: Aging Population Putting Pressure on Pensions, Governments

Verionka Oleksyn, writing for the Associated Press, reports Austria's social affairs minister as warning that by 2010--just four years from now--there will be more 55- to 64-year-olds than 15- to 24-year-olds in the European Union. Coupled with a falling birth rate, European lawmakers are struggling with "how to financially shoulder the burden of an aging society while staying competitive globally and finding workable incentives for people to have more babies."
According to a recent EU report, the bloc's working age population is projected to fall by 48 million, or 16 percent, between 2010 and 2050, while the number of seniors is expected to rise sharply by 58 million, or 77 percent.

Europe will go from having four people of working age for every senior citizen to a ratio of two to one by 2050, predicts the report by the Economic Policy Committee and the European Commission.
Oleksyn also writes that because general taxation is expected to come up short to pay for retirement benefits and healthcare, governments are looking into options such as mandatory retirement savings and insurance programs, or even spending less on the younger generation.

Source: Miami Herald "Aging Europe faces economic hurdle" (July 24, 2006)

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