European Commission calls for greater parity in retirement ages | Europe| News and current affairs from around the continent | DW | 29.06.2010
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European Commission calls for greater parity in retirement ages

The problem of European pension funds has long been known: more people are retiring and fewer people are working. But governments across Europe are finding it difficult to convince people to retire later in life.

Elderly woman figure walking on stack of euro coins

Many Europeans enjoy an early, comfortable retirement

The issue of retirement in Europe has become a tiring debate. Governments know their pension funds will not last much longer, yet no country's population seems willing to give up their right to retire at a comfortable age.

As a partial solution, the European Commission has ambitiously suggested that the general retirement age in Europe be gradually raised to 70 by the year 2060. It also calls for no more than a third of adults to be in retirement in the future.

European Commission President Jose Manuel Barroso articulated this goal earlier this year when he said that "75 percent of the population age 20 and 64 should be employed."

But the European Union is far from that goal, with the average EU citizen retiring just after 60 - notably younger than in many other parts of the world.

Greek example

Elderly couple walking through Athens

Greece has been forced to cut pension benefits for the elderly

No event has shown more clearly the inequalities across the EU in retirement ages than the Greek financial crisis. Greece's relatively low retirement age - which the government hopes to soon raise - has left many wondering why the struggling country should deserve help from other EU countries when their labor market is not putting in their fair share of working years.

Speaking in May about an EU bailout for Greece, Swedish Finance Minister Anders Borg voiced the frustration shared by many more prosperous countries.

"It's quite clear that our taxpayers are not willing to pay for Greeks who retire in their forties or fifties, that is out of the question," he said.

The situation is not much better in France, where the average working man retires before he turns 59. French President Nicolas Sarkozy's plans to raise the official retirement age from 60 to 62 - which he has called the "mother of all reforms" - has led to massive street protests and strikes.

Both Germany and Spain have plans to raise their retirement ages from 65 to 67, while the new British government plans to reconcile the lower retirement age for women with that of men, at 65.

Protest against increased retirement age in France

Attempts to raise the retirement age in France have led to massive protests

East-west divide

There are also large gaps between the retirement ages of new EU members in eastern Europe and the older members in the west. Arup Banerji of the World Bank said the solution is already widely known - keep people working for longer - but recognized the difficult process of implementing it.

"Retirement ages in these (eastern European) countries are very low compared to any other part of Europe, and life expectancies - especially life expectancy at age 50 or so - are not that different," he said. "And therefore part of the challenge is over the next 20 years to start increasing retirement ages so that today's 40-year-olds don't retire when they are 60, but actually carry on a productive life."

Countless politicians have called for greater economic and financial policy coordination among EU and eurozone member states, including Joseph Daul, chairman of the center-right European People's Party in the European Parliament. But the challenge lies in convincing many differently-minded countries to find common ground.

"I'm not saying that the 27 (EU member states) have to collectively decide on a retirement age in Brussels," he said. "But I am saying that we need a mutual cooperation and harmonization if we want to live in the eurozone."

Author: Christoph Hasselbach (acb)
Editor: Rob Turner

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