EUROPE - Governments will increasingly expect the private sector to provide pensions as longevity threatens to bankrupt European economies over the next few decades, according to Maplecroft, a consultancy.

According to a fiscal risk index published today, Italy tops the list of economies categorised as at "extreme" economic risk. Of the remaining 11, only one - Japan, ranked ninth - is outside Europe.

The others were Belgium, France, Sweden, Germany, Hungary, Denmark, Austria, the UK, Finland and Greece.

The study rated 163 countries according to criteria including old-age dependency to 2050 and public spending on pensions.

According to the report's forecasts, by 2050, 62% of Italy's population will be elderly - compared with 59% in Germany, 47% in France and 38% in the UK. 

With employment rates among over-65s introduced as a variable for the first time in this year's report, the lowest rates of productive over-65s were in countries in the 'extreme risk' category - with 1.4% in France compared with an average of 28% across the cohort.

However, analyst Siobhan Tuohy pointed out that Japan's relatively high 19% elderly employment rate suggested it was "not such a major factor yet".

Although the report stopped short of policy recommendations, Maplecroft chief executive Alyson Warhurst claimed governments in high-risk countries might rely on businesses to provide pensions to absorb public costs.

In the meantime, pension schemes in 'extreme risk' economies are acting to hedge their own longevity risks.

At the end of last year, ATP, the DKK516bn (€69.2bn) Danish labour supplementary fund, earmarked additional resources from its reserves after adopting a new model that factors in projected lifespan increases likely to cost DKK37bn.