ECB’s Trichet says contributions could double
EUROPE - European Central Bank president Jean-Claude Trichet has warned that pension contributions could double without further reforms.
"That of pensions is a European problem, due to the ageing population and the resulting pressure on public funds," he said in an interview with L'Espresso reproduced on the ECB website.
"Without further reforms to pension systems, the contribution rates would need to be doubled in some countries, up to as much as 40% of salaries in some cases, in order to keep a balance in the system's accounts."
He called for "comprehensive reforms" to tackle the consequences of ageing populations, we need comprehensive reforms.
He said: "Even if there are no unequivocal solutions, some measures are valid for several countries: raising the retirement age, eliminating early retirement incentives, reduction in replacement rates, integrating public pensions within a system which allows future payments to be financed so that the ageing of the population does not create imbalances between generations."
Citing the European Court of Justine, he said men and women should retire at the same age.
The idea that there is time to make the needed reforms was a "complete illusion".
He characterised the problem not as a compromise between the various members of our society but as a "compromise between the present and future".