Thu Oct 21st, 2010 at 07:15:56 AM EST
In the recent comment thread on the French protests, Mig reminded me that there is an EU consultation on the subject of pension reform, and suggested that I draw up a draft response that ET could polish for shipment.
So here goes.
Part One: The Premises
The justification for the consultation is itself worth responding to, as it attempts to enforce a number of framings that are simply objectively false.
Ageing populations in all Member States have put existing retirement systems under massive strain
This is not generally true. The European member states are in varying stages of their demographic transition - some have it before them, others behind them. The demographic picture is a lot more nuanced than it is painted in this call for papers.
and the financial and economic crisis has only increased this pressure.
This, again, is not generally true. It is only true for those member states who have (foolishly) structured their retirement schemes as if they were hedge funds. For those states who fund retirement benefits from direct sovereign outlays, the financial crisis poses no problem for the retirement schemes - indeed, during a demand-side economic crisis generous retirement schemes are a feature, not a bug, of macroeconomic policy.
the pension challenge - one of the biggest facing Europe and most parts of the world today
It is a little hard not to wax sarcastic about this. Fossil fuel depletion? Financial regulation? Mainstream European right-wing leaders acting all nostalgic for fascism? The de-industrialisation of every part of Europe outside Poland and the Ruhrgebiet? Apparently those are chopped liver next to the all-important need for reform.
László Andor, EU Commissioner for Employment, Social Affairs and Inclusion said:
"The number of retired people in Europe compared to those financing their pensions is forecast to double by 2060 - the current situation is simply not sustainable. In addressing this challenge the balance between time spent in work and in retirement needs to be looked at carefully."
This is a shockingly deceptive framing.
The number of retired people relative to the number of working-age people is completely irrelevant. The relevant figure is the number of working-age people relative to the total population - including those who are too young to be in the working-age population. Properly accounting for those who are below working age offsets the increase in those above working age to a considerable extent in those countries member states that have a declining population (and those member states that have a growing population are not scheduled to have a demographic crisis at all over the period covered by Eurostat projections).
In particular, [the consultation] aims to address the following issues:
- Ensuring adequate incomes in retirement and making sure pension systems are sustainable in the long term
- Achieving the right balance between work and retirement and facilitating a longer active life
- Removing obstacles to people who work in different EU countries and to the internal market for retirement products
- Making pensions safer in the wake of the recent economic crisis, both now and in the longer term
- Making sure pensions are more transparent so that people can take informed decisions about their own retirement income
The consultation period will run for four months (ending 15 November 2010) during which anyone with an interest in the subject can submit their views via a dedicated website. The European Commission will then analyse all responses and consider the best course for future actions to address these issues at EU level.
Part Two: Analysis
[Taking a leaf out of Mig's book here...]