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IPE special report May 2018

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EU says “crucial” to cut retirement incentives

EUROPE – European Commissioner Pedro Solbes says it is crucial for European employment growth that incentives for early retirement are removed.

“Although possibly partly reflecting a comparatively higher preference for leisure, the gross underutilisation of human resources in the European Union cannot be seen in isolation from prevailing incentive structures and poorly functioning labour markets,” economic and monetary affairs commissioner Solbes said.

“In this respect, it is crucial to pursue and strengthen reforms aimed at making work pay, eliminate poverty traps and remove incentives to retire early. It was also necessary that wage bargaining systems allow wages to reflect productivity to prevent workers from being priced out of jobs. And he called for more flexible work organisation and less strict employment protection legislation.

Solbes told a ministerial meeting of Organisation for Economic Cooperation and Development in Paris that previous European structural reforms have paid off to the tune of five million jobs being created since 1999. He said that despite weak economic growth, a further 500,000 jobs were added last year. “Nevertheless, there is no reason for complacency.”

Last month Solbes said the EU is a long way from achieving its target of 50% employment among 55-64 year-olds.

Solbes also reaffirmed the European Commission’s stance on corporate governance. “Restoring confidence in market integrity is of the essence,” he said. “Public authorities have a key role to play by promoting timely disclosure of reliable information, a proper system of checks and balances, and an efficient framework of monitoring and supervision.”

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