Europe to be “retirement village” without reform
EUROPE – A leading pensions academic has raised the spectre of Europe becoming a “retirement village” if the continent ignores the challenges of demographic ageing and pension reform.
“In a world of growing populations and of accelerating economic development and growth in other nations and regions, how will Europe escape being a retirement village with increasingly poor retirees and fewer opportunities for their children,” says Oxford University professor Gordon Clark.
“This is surely not the vision of the EC or the elites of its member countries,” Clark says. “And yet, it seems to be the vision of those set against systemic reform and those in global capital markets who believe Europe has neither the capacity nor the will to transform the past.”
In a new book, “European Pensions and Global Finance,” Clark argues that the global financial centres of London and New York are “figuratively and symbolically” the enemies of social solidarity and continental European political traditions.
His words are borne out by the wording of the agenda for the forthcoming European Summit in Brussels: “The Union is committed to preserving a high level of social inclusion based on the principles of solidarity and social inclusion.”
Clark is a member of the UK’s National Association of Pension Funds’ panel of experts and a governor of the Pensions Policy Institute.
The tensions between Europe’s pension systems and the world of global finance “will continue to dominate the national and EU politics and economics over the coming decades,” he writes.
He says that there is a realisation in Europe that “neo-liberal reforms aimed at promoting private pension arrangements will only succeed if grafted on the skeleton of social solidarity”.
Clark adds that it could be argued that Europe has not yet taken the implications of demographic ageing seriously. And he questions how Europe will cope with the increasing inequality of opportunity created by the differences in welfare of retirees.