WRITTEN QUESTION E-3851/00

by Paulo Casaca (PSE) to the Council

(20 December 2000)

Subject: Early retirement

It has been reported in the press that, at the Ecofin meeting of 8 November, the conclusions of an interim report drawn up by the Economic Policy Committee ('EPC progress report on the impact of ageing populations on public pensions systems', Ecofin 303, 12791/00) were noted and endorsed. One of those conclusions is that, throughout the European Union, the retirement age will have to be raised and early-retirement schemes will have to be restricted if pensions schemes are to be sustainable.

This statement had enormous public impact, especially since most of the European (and in particular the Portuguese) press described it as coming from the European Union.

On 22 November I received a Communication Communication (SEC(2000) 2025 final) which contains a proposal for a Council regulation on early-retirement schemes within the Commission.

To my horror, the purpose of the proposal is not to restrict Commission officials' existing access to early-retirement schemes but, rather, to promote an early-retirement scheme for 600 officials.

In view of the above, would the Council answer the following questions?

(a) Does the Council endorse the above report?

(b) At the Ecofin meeting, did the Commission express any disagreement with the report?

(c) Is it true that the Commission was not represented on the working party which approved the report?

(d) Does the Council not consider that contradictory statements and proposals such as these undermine the credibility of the European Institutions?

Reply

(12 March 2001)

1. On 7 November 2000, the Council examined the first progress report by the Economic Policy Committee (EPC) on the impact of ageing populations.

This report states that, on the assumption of a continuation of the present demographic and macroeconomic tendencies, in the majority of Member States the effects of ageing over a time projection until 2050 is expected to add roughly 3 to 5 % of GDP to pension expenditure.

The EPC identifies several possible ways in order to control this foreseeable rise in public expenditure for pensions namely:

- increases in retirement age, especially in early retirement schemes,

- increases in labour participation rates, especially amongst women,

- measures designed to increase continued participation in the workforce of workers over 50 years of age,

- further reduction of public debt so that budgetary surpluses and decreases in interest payments on public debt would balance expected increases in pension expenditure,

- measures conducive to higher economic growth than presently.

The Council and the Commission representative recognised the relevancy of this first report of the EPC, in which both the Community and Member States are represented, and of its main findings.

The Council asked the EPC to continue its work on the issue and to extend the scope of its work to taxation aspects of pensions and increased health expenditure from public funding caused by ageing populations.

The Council will periodically review the issue in the light of the further work of the EPC.

2. As for the early retirement scheme proposed by the Commission in the framework of its reorganisation and restructuring, the Council will examine this proposal on its own merits when it will be formally submitted by the Commission.