In a long string of events that are “shaky” (Yes, I’m looking at you, Greece), as its population increasingly ages, European Union officials are calling pensions “unsustainable.”
It’s no secret that many populations within the EU are aging, or downright “dying off.” At the present, there is an average of four workers per person over the age of 65. Not bad for now, but by 2060, that ratio is expected to get cut with it, and pensions are going with it.
“The current situation is simply not sustainable, “said EU Employment Commissioner Laszlo Andor, “The choice we face is poorer pensioners, higher pension contributions or more people working more and longer.”
According to a BBC article, as long as pension legislation is not changed, the EU powerhouse economies will be faced with increased pension payments – and therefore, the system must be changed. As the population ages, governments will be forced to increase the amount of money they pump into pension payments. There simply will be more retired citizens that need their payout.
Never thought you’d see the day where European countries try to take benefits away from its citizens? Reality just might be about to hit home.
One of the solutions? Make people work longer. Yep, the EU is considering pushing the retirement age back to 70 instead of 65. However, this situation is hitting Europe at a time of crippling budget cuts. Might the era of entitlement be replaced by thinner budgets? It will have to if the EU is to increase its budget sustainability.
This situation is tied to deficit spending in America. In my opinion, this is the same trend that is occurring in America, or rather, the trend that should be occurring. If budget cuts do take place, the EU governments will be one step ahead of the American Congress, who seems bent on spending every penny that isn’t nailed down.
I applaud the EU for taking population trends and unsustainable budgeting into consideration – that is, if the countries’ governments take them seriously.
However, this is just my own opinion. What do you think? Be sure to comment using the link below this post.
Read the original BBC article here: http://www.bbc.co.uk/news/10545280