EUROPE – The European Central Bank has stressed the importance of changes to Europe’s pensions in maintaining the area’s social security systems.

In its October monthly bulletin, the central bank states: “Current efforts to set in motion important changes in pension and health systems in order to prepare for the ageing of society are of immense significance in ensuring the sustainability of our social security systems.”

The bulletin highlights the bank’s concerns about the financial stability of Europe. “There is growing evidence that most countries will miss their budgetary targets for 2003 by a significant margin, and, in a number of cases, budgetary plans for 2004 are not reassuring.”

The ECB praises the Stability and Growth Pact, and says “it is essential to fully abide by its rules to implement them in every respect”. It adds: “It is worrying to see that not all countries with severe imbalances have so far introduced sufficient consolidation measures.”

Many European countries have been forced to address the issue of an ageing population, and increasing state pension costs in order to comply with the Stability and Growth Pact. The Pact is designed to maintain budgetary discipline of euro zone countries.