The The Governor's Governor's
Concluding Concluding Remarks Remarks
Annual Annual Report Report
Rome, Rome, 31 31 May May 2017 2017
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financial
123rd
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The Governor's
Concluding Remarks
Annual Report
2016 - 123rd Financial Year
Rome, 31 May 2017

Ladies and Gentlemen,
Carlo Azeglio Ciampi, President Emeritus of the Italian Republic and
Governor Emeritus of the Bank of Italy, passed away on 16 September.
He joined the Bank in 1946, serving as Governor from 1979 to 1993.
Immediately following his appointment he had to address the gravest banking
crisis of the post-war period, with the Bank of Italy still shaken by the dramatic
events that had seen its top management unjustly accused.
During his governorship, he achieved full autonomy of the central
bank and created the conditions for bringing high inflation under control;
he initiated the construction of a modern payments system, based on the
technological infrastructure essential for a large market economy; he began
the reform of the Bank's supervisory activities with a radical revision of the
rules and the banking market.
Ciampi left a lasting imprint on the Bank's management, introducing into
its institutional culture a working method based on teamwork and an ability
to combine different skills. This method was a hallmark of his work in all the
positions of high office that he held after leaving the Bank.
With his death, Italy has lost a great statesman, a firm believer in the
founding values of democracy and in a united Europe, which he considered
fundamental to guarantee peace, freedom, equality and prosperity. We are left
with the principles that inspired his way of working: a sense of duty, respect
for others and awareness of one's own responsibility. These values help us to
understand what is meant by the phrase 'serving the general interest', Carlo
Azeglio Ciampi's lodestar throughout his life.
In the last six years the monetary policy response to the financial crisis,
the sovereign debt crisis and the risks of deflation have had a profound impact
on the size and structure of the Bank of Italy's balance sheet. Assets increased
by more than €440 billion to €774 billion. The portfolio of securities held for
monetary policy purposes rose from €18 billion to €245 billion. Lending to
banks grew by €157 billion.
As I recalled on 31 March in my report to the Ordinary Meeting of
Shareholders, in which I also dealt with the capital reallocation process, the
expansion of the balance sheet has not only increased profitability but also
heightened risks; these have been addressed by the introduction of capital
safeguards. The 2016 financial year closed with a net profit of €2.7 billion; after
allocations to the ordinary reserve and dividends paid to the shareholders, €2.2
billion were allocated to the State, in addition to the €1.3 billion paid in taxes.
The institutional innovations in supervision and the resolution of banking
crises have altered the responsibilities of the Bank of Italy, increasing its tasks.
Our remit in the area of safeguarding financial stability has been expanded,
while the Bank has strengthened its longstanding role in Europe as provider
of high-tech payment, market and statistical services. Before the end of this
year private operators will have completed their adhesion to the European
securities settlement platform TARGET2-Securities, a complex infrastructure
whose entry into full operation makes a crucial contribution to the process of
integrating Europe's financial markets.
We give an account of last year's numerous organizational changes in the
Bank of Italy's Report on Operations and Activities, which is published today
together with the Annual Report.
At a time of profound technological innovation, these changes have
contributed to a reduction in operating expenses, which have come down
by 15 per cent in real terms since 2009. During this period the Bank's staff
diminished by 870 to around 6,900. Today secondments to other European
and international organizations number more than 150 and have increased
sharply since the launch of the Single Supervisory Mechanism.
The Bank of Italy holds fast to its principles, mindful of the responsibilities
entrusted to it by society and careful to use the resources at its disposal efficiently.
My own personal appreciation, that of the Governing Board and the Board
of Directors, goes to the women and men who work here: their personal and
professional qualities, and dedication to the common good enable the Bank
to look with confidence to the changes that the future will inevitably bring.
The economic situation and monetary policy
The world economy is growing at a rate of more than 3 per cent, supported
by expansionary policies in the main economic areas; the rise in investment
is providing renewed vigour to world trade (Figure 1). Optimism prevails in
the financial markets despite the uncertainty connected with the future stance
of economic policies in the United States, the United Kingdom's exit from
the European Union, the high level of debt in various parts of the world, and
persistent geopolitical tensions.
In the euro area growth is strengthening, led by consumption and
investment in capital goods. In 2017, GDP is expected to grow by almost 2 per
cent in the euro area, around twice the rate for Italy. Consumer price inflation,
which had been practically nil since the end of 2014, has picked up in the last
six months, sustained mainly by the rising prices of energy and food products.
According to the European Central Bank's March projections, consumer price
inflation in the area will be 1.7 per cent for the year as a whole, but scarcely 1.1
per cent net of the most volatile components (Figure 2). The corresponding
figures for Italy are just under 1.5 and 1 per cent.
Economic activity and inflation are benefiting from the strongly expansionary
stance of monetary policy; fiscal policies are on the whole neutral. The measures
we have adopted in the Governing Council of the European Central Bank since
mid-2014 have succeeded in averting the risk of a deflationary spiral which,
given the high level of debt, both public and private, would have had severe
depressive effects on the economy of the entire area. Since March 2016, when
the asset purchase programme was expanded, the probability of deflation implied
by option prices - which had exceeded 30 per cent at the beginning of 2015 -
has gradually diminished and is now almost nil. The downward trend in
medium- and long-term inflation expectations has come to a halt.
The objective of price stability in the euro area - a rate of inflation below,
but close, to 2 per cent sustainable over the medium term - has yet to be
achieved. Core inflation remains constrained by unemployment in many
euro-area economies and by sluggish wage growth, even in the countries with
better labour market conditions. The normalization of inflation expectations
still has to be consolidated. Credit demand remains weak.
A highly accommodative monetary policy is needed to achieve the full
convergence of inflation to the ECB's objective. A change in the monetary
policy stance, to be implemented with the requisite graduality, will serve as
confirmation that demand growth and price stability can be self-sustaining in
the medium term.
Long-term interest rates are very low; besides monetary conditions, this
reflects the depth and exceptional length of the recession. Owing to the still
high level of debt, it will take more time than in past cyclical recoveries to
regain suitable levels of investment demand and, therefore, profitability.
Structural factors, such as the slowdown in productivity growth and the effects
of demographic trends, are playing a role in keeping yields down.
Monetary policy alone cannot guarantee a return to strong and steady
growth. The structural problems affecting the national economies must be
tackled by expediting the necessary reforms. Where public debt is especially
high, deficit and debt reduction must be pursued decisively, with a budget
composition that is more conducive to growth; where debt is lower, it is possible
to support internal demand, especially through investment in infrastructure
in order to avoid an overly large net external position which could provide an
argument for protectionist policies.
Italy's economy, though still weak, has been expanding for two years. The
cyclical improvement is spreading to most industrial sectors; positive signals
have also recently emerged in services and construction, mainly in residential
housing, which is benefiting from tax incentives for the renovation of existing
homes and from low interest rates. Activity in non-residential building is
struggling to gain traction, owing to sluggish public investment.
The improved performance of Italian exports, which has kept pace with
the increase in world trade, continues to be coupled with a moderate increase
in household expenditure, driven by the favourable outlook for income, and
more recently, a recovery in private investment. The greatest increase has been
in purchases of capital goods, which have a direct impact on the economy's
potential output; this type of investment grew almost 5 per cent last year but
is still 14 per cent below the 2007 peak.
Italy's southern regions have also posted growth. Positive indications,
though less widespread with respect to the Centre-North, are nonetheless
discernible from the data collected by our branches from local economic
operators. The gap with the rest of the country remains wide, with a difference
of more than 40 per cent in GDP per capita. The balanced development of
Italy's economy necessarily depends on removing the obstacles, not only of an
economic nature, that impede the recovery of Italy's South.
Overall, there are still ample margins of slack and firms' demand for
labour is insufficient. This is reflected in the performance of prices while wage
growth remains very subdued. Consumer price inflation was slightly negative
on average in 2016. Core inflation decreased to 0.5 per cent, but we expect it
to increase gradually.
At the current rate of growth, GDP would return to its 2007 level in the
first half of the 2020s. Apart from cyclical factors, Italy's economic development
is hampered by rigidities in the business environment, the slow growth of
productivity, and an insufficient employment rate. Decisions to invest can be
encouraged by continuing the reform effort to favour business activity. The
positive signals that have emerged must be consolidated. A growing number of
firms consider the tax incentives introduced for the purchase of capital goods
to be significant; this year they have been expanded to include investment in
advanced digital technology.
The years of crisis
Ten years marked by a double-dip recession - first, the global financial
crisis, then, the sovereign debt crisis - and the risk of a deflationary spiral have
weighed heavily on the euro-area economy. Euro-area GDP fell by 4.5 per cent
during the first crisis and, after recouping 3.5 percentage points, by over 1 per
cent during the second, with sharply varying trends from country to country.
It was not until 2015 that the economy regained 2008 levels (Figure 3).
Some countries were especially hard hit. The Italian economy suffered the
worst years it had ever experienced in peacetime (Figure 4). The effects of the
double-dip recession proved to be worse than those of the Great Depression.
From 2007 to 2013 GDP fell by 9 per cent; industrial production declined
by almost a quarter, investment by 30 per cent, consumption by 8 per cent.
Today Italy's GDP is still more than 7 per cent below what it was in early
2008; in the rest of the euro area it is 5 per cent above that level.
The problems were exacerbated by the vulnerabilities of EU institutions
and macroeconomic and financial imbalances whose importance had long
been underestimated in a number of countries. Following Economic and
Monetary Union, integration had progressed slowly on the assumption that
common rules and market forces would make up for the lack of a unified
government policy approach.
Nevertheless, the reaction to the global financial crisis was coordinated and
incisive. As early as the end of 2008 the major central banks were providing
ample liquidity and cutting official interest rates in concert, an unprecedented
development; they eventually reduced them even further, to historic lows. At
the same time, the European Council approved a macroeconomic support
plan. Almost all the countries adopted expansionary fiscal policies; many took
measures to stabilize the banking and financial system. In April 2009 the
members of the G20 agreed on further actions.
Unlike other countries, Italy suffered from the slowness with which it
had undertaken the modernization necessary to cope with the challenges of
globalization, technological change and monetary union. Structural weaknesses
amplified the repercussions of the crisis and further delayed recovery. Between
2007 and 2009 GDP fell by 6.5 per cent, recouping more than 2 percentage
points over the next two years. In 2011 industrial production was still 15
percentage points below its pre-crisis level, while Germany's industrial output
had in large part recovered; the volume of German goods exports had already
regained 2007 levels, while Italian exports were still 5 per cent below them.
During that phase, in many countries the financial support provided by
governments to banks was considerable; at the end of 2011 the impact of State
aid on public debt amounted to 48 per cent of GDP in Ireland, 11 per cent
in Germany, and 7 per cent in the Netherlands and Belgium. In Italy, it came
to 0.2 per cent of GDP, reflecting the limited exposure of our banks to the
structured finance products that had triggered the financial crisis.
The response to the sovereign debt crisis in the euro area that began in
2010, after the true state of Greece's public accounts came to light, was not so
rapid or adequate. The incompleteness of the European construction, with its
lack of institutions for managing member state financial crises, contributed
to this delay.
Concerns about the resilience of the economies that were affected by
imbalances in banking systems, balances of payments and public accounts,
triggered market turmoil. Borrowing conditions became prohibitive for Ireland
and Portugal which, as Greece had already done, requested financial assistance
programmes in autumn of 2010 and spring of 2011. Tensions then spread
to Italy and Spain, with the dramatic widening of the differentials between
their government bond yields and those of Germany. The problems in the
government securities market extended to the banks, whose credit ratings were
equated to those of their sovereign; the consequent tightening of the credit
supply contributed to the start of a new recessionary phase; fears mounted for
the break-up of the single currency.
To defend the sustainability of the public debt, fiscal policies took on a
restrictive stance in the countries that had agreed to assistance and in those
that feared loss of access to financial markets; an analogous policy was adopted
in other countries as well, including Germany. The lack of a common budget
precluded supranational action to counteract the strong procyclical impulse of
national policies.
At that time macroeconomic conditions in Italy were deteriorating
much more rapidly than indicated by our projections and those of the
leading international organizations. In January 2012 we forecast a 1.5 per
cent drop in GDP (0.4 per cent under a less unfavourable scenario) for
2012 and 2013; in the summer this forecast was revised to 2.2 per cent; in
the end, the decline amounted to 4.5 per cent. This result was due in part
to the deceleration in international trade and the collapse in confidence in
euro-area prospects, which amplified the effects of credit tightening and the
budgetary adjustment.
In the final months of 2011, monetary policy took on a clear expansionary
tone, reinforcing the measures to counter the serious liquidity shortfalls in
the banking system and the consequent fragmentation of financial markets.
But the need for intervention to safeguard the single currency struggled for
recognition in an environment in which tensions were blamed largely on the
deterioration in national outlooks for growth and public finances and not
also on a systemic risk, such as the potential break-up of the monetary union.
After overcoming the differences of opinion on this issue, in the summer of
2012 the ECB Governing Council authorized the purchase of the government
securities of countries in difficulty. The announcement sparked an immediate
improvement in financial market conditions and fostered a resurgence of
capital inflows to the countries affected by the crisis.
Monetary measures, European institutional reforms, the credibility
gained thanks to the corrective measures of national governments, and the
agreements on financial assistance to the Spanish banking system and on the
renewal of aid to Greece, all helped to ease financial tensions, bringing interest
rate spreads back to regular levels and setting in motion the normalization of
economic conditions within the euro area.
A contributing factor in this result was the decision to implement the project
for Banking Union: the complexity of the reform and the commitment to carrying
it out within a very short time frame, at least as regards the Single Supervisory
Mechanism, were signals of the strong determination to continue on the path
to integration. I have often remarked on the difficulties stemming from the
incompleteness of the new framework and the lack of consideration of the risks
associated with implementing the new legislation on banking crisis resolution.
Two sources of weakness
The consequences of the double-dip recession for Italy are most clearly
observed in the behaviour of two variables, radically different in nature and
dimension, which owing to their rate of growth and current level are frequently
cited as Italy's main problems: namely, the public debt and the loans defined as
'non-performing' held by banks. These are sources of weakness that limit the
room for manoeuvre of the State and of financial intermediaries; both make
the Italian economy vulnerable to market turmoil and can amplify the effects
of cyclical fluctuations.
In order to assess these sources properly and identify the best strategies to
manage their impact, we must first recognize their close connection with the
problems of the economy as a whole. On both fronts we must continue to act,
with resolve and clarity of purpose, to preserve and reinforce the trust of those
who deposit their savings and invest in Italy and its banks.
The public debt
The ratio of debt to GDP has been at high levels for over thirty years
now. Notwithstanding the reduction that began in the mid-1990s, at the
outbreak of the crisis it was still close to 100 per cent. Since 2008 it has risen
rapidly, to the point of exceeding 130 per cent (Figure 5). Not counting the
Treasury's liquid assets, last year the ratio basically stabilized. Following the
most turbulent phase of the sovereign debt crisis, fiscal policy has accompanied
the expansionary monetary policy stance, mediating between the necessity of
holding debt in check and that of supporting the recovery.
Since 2008 the increase in the ratio of debt to GDP has essentially been
attributable to the poor performance of the latter. Had real output grown at
even the low average rate recorded in the years between the launch of Economic
and Monetary Union and the onset of the financial crisis, and had the rise in the
deflator been consistent with the ECB's inflation aim, the larger denominator
alone would have determined a debt-to-GDP ratio today comparable to what it
was in 2007. Without the crisis, higher growth would also have enabled deficits
to be brought down and avoided the need to provide financial support to other
countries; the ratio would have been even lower as a result.
Long-term projections such as those made periodically by the European
Commission indicate no significant risks to the sustainability of Italy's public
debt. This is thanks to the reforms that have assured the financial equilibrium
of the pension system, wiping out almost one third of the implicit pension
liabilities accrued up to the early 1990s and enabling it to withstand adverse
demographic or macroeconomic shocks.
Italy's high public debt is nevertheless a source of vulnerability and acts as
a brake on the economy. It makes it more costly to fund productive investment
by the private sector; it induces greater recourse to distortionary tax systems,
with adverse effects on the capacity to produce income, save and invest; it stokes
uncertainty, another way in which it discourages investment; and it leaves less room
for macroeconomic stabilization policies. The high debt also exposes the country
to a loss of market confidence and phenomena of contagion. The exceptional and
abrupt widening of the spread between Italian and German government bonds
at the height of the crisis was proof of this; the increase recorded in the last eight
months is another such reminder. Every year market placements of debt securities
issued by the Italian State amount to around €400 billion.
An appreciable and lasting decline in the debt-to-GDP ratio must
commence without delay. There must be no repeat of past errors: the failure to
reduce the ratio of debt to GDP sufficiently in good economic times forced us
to make procyclical adjustments during the crisis.
In this current phase of - moderate - recovery, durable consolidation can
be pursued through prudent budgetary policies, designed not only to lower the
deficit but also to review the composition of expenditure and revenue. Economic
growth can be strengthened and the reduction of the debt ratio facilitated by
giving greater scope to public investment, rethinking the structure of government
transfers, tax subsidies and exemptions, rebalancing the tax burdens on the
various sources of income and redoubling efforts to combat tax evasion.
With annual growth of around 1 per cent, inflation at 2 per cent, and
with the average interest rate on the debt gradually regaining pre-crisis levels,
a primary surplus (net of interest payments) of 4 per cent of GDP, which is
basically consistent with the Government's policy scenario, would bring the
debt-to-GDP ratio below 100 per cent in around ten years. With higher growth,
achievable as part of a package of incisive reforms, a recovery in investment, and
a different composition of the public budget, this could happen even faster.
Italy has already shown it can deliver and maintain a large primary
surplus: between 1995 and 2000 this averaged almost 5 per cent of GDP.
Other countries have done even better and for longer periods of time; between
1995 and 2007 the primary surplus averaged more than 6.5 per cent of GDP
in Canada and about 5 per cent in Belgium, Denmark and Finland. That
is no small achievement, but it is not beyond our reach. According to the
Government's plans, to meet the objectives outlined in the Economic and
Financial Document and avoid next year's scheduled VAT hike will require
the definition of corrective measures in the order of 1.5 percentage points of
output in the three years 2018-20.
A constant, protracted effort to keep the public accounts under control
is indispensable to a lasting reduction in the ratio of debt to GDP against a
backdrop of a return to stable growth. This would have positive effects on
confidence, economic activity, and interest expenses. While not the only
answer, given the constraints on public real estate assets and their heterogeneity,
and the characteristics of the State's portfolio of shareholdings, privatizations
could help to speed up the reduction of the debt.
Non-performing loans
The repercussions of the crisis could not but affect banks' balance sheets.
Between 2007 and 2015 the ratio of bad loans to total loans i.e. exposures to
insolvent debtors, more than tripled, reaching a level that was still below the
peak recorded in the mid-1990s (Figure 6). In several cases, banks' difficulties
were exacerbated by fraudulent conduct and imprudent lending policies.
At the end of 2016 Italian banks' non-performing loans, recorded in
balance sheets net of write-downs, came to €173 billion or 9.4 per cent of total
loans. The €350 billion figure often cited in the press refers to the nominal
value of the exposures and does not take account of the losses already entered
in balance sheets and is therefore not indicative of banks' actual credit risk.
Of the €173 billion in net non-performing loans, €81 billion or 4.4 per
cent of total loans were classified as bad loans, against which the banks hold real
collateral and personal guarantees of over €90 billion and almost €40 billion
respectively. The remaining €92 billion are other non-performing exposures,
whose nominal value has already been written down by roughly a third. For
some of these, a return to regular payments is certainly possible, though to
what degree will depend on the timing and strength of the recovery; active
management of the positions on the part of the banks is indispensable if the
share that become bad loans is to be reduced significantly.
Three quarters of net bad loans are held by banks whose financial
conditions do not require their immediate disposal on the market. Those
held by intermediaries experiencing difficulties, which could find themselves
obliged to offload them rapidly, amount to around €20 billion. As we have
documented, bad loans are recorded in banks' balance sheets at values consistent
with the recovery rates actually observed in the last ten years. If they were sold
at the very low prices offered by the few large specialist debt collection agencies
active in the market today, which pursue very high returns, the amount of
additional write-downs would be in the order of €10 billion.
At the end of 2011 net bad loans held by Italy's banks made up 2.9 per
cent of total loans. A 'system-wide' intervention on non-performing loans,
involving substantial public funds along the lines of what occurred in other
countries, appeared neither justified nor feasible. The increase in bad loans was
not concentrated in any specific sector of the economy; the macroeconomic
predictions made in the course of 2012 were much more favourable than the
results actually achieved. As the sovereign debt market strains grew more acute,
government intervention on non-performing loans appeared incompatible
with the state of the public finances.
In the years immediately following the picture changed rapidly. The
recession proved much longer and deeper than originally forecast; the attendant
rise in business failure rates and unemployment fuelled the growth of net bad
loans, which in 2015 reached 4.8 per cent of total loans. The abatement of
the tensions on sovereign debt markets, which began in mid-2012, gathered
momentum in 2013, and at that point made desirable the establishment of
a publicly supported company to manage banks' non-performing assets, a
possibility which we actively supported. Its fruition was, however, impeded by
the position on State aid adopted by the European Commission in mid-2013.
In part following the proposals drawn up by European institutions, in recent
months the idea has been mooted again. We remain convinced of its potential
usefulness, provided that the asset sale prices are not excessively detached from
their real economic value, banks' participation in the scheme is voluntary, and
the restructuring plans of the participating banks are properly defined ex ante.
Whether or not there is a real determination to proceed down this path must
be clarified without delay: uncertainty slows the conclusion of the transactions
under way and discourages those that could be completed in the coming months.
In 2016 the flow of non-performing loans declined, as did the ratio of
non-performing loans and that of bad loans to total lending. The ongoing
recovery supports this trend. The sales currently scheduled by the major groups
could raise the reduction in the net bad loan ratio significantly.
The large stock and low market prices of non-performing exposures
reflect Italy's excessive time to recovery, which is far longer than in the other
main European countries. At the end of 2015 recovery times averaged almost
eight years for bankruptcies and over four years for property foreclosures.
Legislative measures taken in recent years go in the right direction but must
be strengthened to ensure a sufficient shortening of recovery times. It would
be especially useful to increase the degree of specialization in the handling
of insolvency cases, providing for the centralization of the more complex
proceedings, including by reviewing the territorial jurisdiction of Italy's courts.
For their part, the banks must make the best possible use of the
instruments already available in the form of out-of-court agreements with
firms on debt restructuring and the transfer of real estate pledged as collateral.
As recent analyses by the Bank of Italy have shown, incentives for the disposal
of non-performing loans would derive from the removal of the regulatory
disincentives that impede the sale of large amounts of these assets by banks
that use advanced internal models for calculating capital requirements.
Sufficient and timely information makes the management of
non-performing assets less costly, increasing their value; harmonization at
European level would facilitate cross-data analysis, with positive effects on the
prices and speed of the transactions. The new reporting on bad loans that we
introduced last year is a step in this direction, inducing banks to manage these
exposures more actively and effectively.
Supervisors are mindful of the need to refrain from imposing blanket
sales of non-performing loans, which de facto lead to a transfer of resources
from Italy's banks to a handful of specialized investors. However, as indicated
by the recent guidelines issued at European level and drawn up with the
active contribution of the Bank of Italy, the largest intermediaries (classified as
'significant' within the Single Supervisory Mechanism) must adopt strategies to
improve the management of these assets together with ambitious operational
plans to ensure their substantial and progressive reduction. Possible options
include: the creation of separate and specialized management units, recourse
to external managers, the sale of the portfolios on the market. We are working
to extend the guidelines to the banks under our direct supervision.
Labour and growth
It is in the labour market in particular that we see the most painful legacy
of the crisis: in 2014 the unemployment rate came to nearly 13 per cent,
more than double that of 2007 (Figure 7); unemployment among young
persons aged 15 to 24 increased from 20 to over 40 per cent; the figures are
higher in the South. The gap between the quality of the positions offered
and workers' expectations widened: nearly all fixed-term employees would
prefer a permanent position, while two thirds of part-time workers would
like a full-time job, compared with two fifths ten years ago. Households' living
standards have fallen, especially for the most disadvantaged.
There has been some improvement in the last two years thanks to the
cyclical recovery, social security contribution relief and measures to improve
the efficiency of the labour market. However, at the end of 2016, less than
60 per cent of people aged 20 to 67 were employed and only one out of two
women. About a quarter of people younger than 30, and a third in the South,
were not in education, employment or training. These figures are far from
those of most other European countries.
The question of labour is central. It relates to social integration and
personal identity. On the economic level, it should not be seen solely as a
cyclical problem: the economy's growth potential depends on the quantity
and quality of the labour force and the capacity of the productive economy
to provide adequate employment. Demographic and technological tendencies
play an important role, destined to increase in the years to come.
According to Istat, whose forecasts even assume a net annual influx of
about 150,000 migrants, the number of people aged 20 to 69 will fall by nearly
7 million in the next 30 years. The population older than 70 will increase to
about 30 per cent of the total, with important repercussions on the composition
of employment and further growth in the demand for jobs in per