Sunday, 4 July 2010

PENSIONS (2)

In my blog on pensions (16/6/10) I said that I thought that France's decision to raise its retirement age from 60 to 62 was too little, too late.

It seems that the Greek Government agrees with me. If a bill is approved by Parliament later this month, then the retirement age for all public sector workers, both men and women, will rise to 65 from 2013. That is an increase of 8 years for men and a whopping 13 years for women.

Greece is, admittedly, a special (basket) case. But it gives a very clear demonstration of what needs to be done. The entitlements of the about-to-retire generation are unaffordable in many European countries. Greece will not be the last country to cut them.

Walter Blotscher
Posted by Walter Blotscher at 20:58

2 comments:

  1. Michael5 July 2010 at 15:17

    In many European countries? Which countries or if it is easier which can afford it? I would say these pensions are very affordable in Denmark,Sweden,Norway,Finland because the tax base makes them so.

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  2. Walter Blotscher5 July 2010 at 22:33

    Hi Michael,

    That's just my point, they no longer are affordable, even with the high tax base. It's a demographic thing; too many pensioners, and not enough workers to provide for them. And the only solutions are save more (i.e. even higher taxes and/or pension contributions, not popular), more workers (more babies and/or immigrants, also not popular) or work longer (also not popular, but justified by rising life expectancy and possible since it can be done by Government fiat).

    I think that the only countries that will really be OK are Norway (because of the huge oil fund already saved up) and some Eastern European countries (because they never really had a pension system to start with). For everyone else, something has to be done.

    Regards,

    Walter

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