shocks, both at the macro and the micro level, crystallise into permanent institutional arrangements that put downward pressure on the effective retirement age and, hence, undermine future governments'capacity, if not to ward off the ageing crisis, then at least to soften its impact. if we do not want the famous lisbon objectives to become just a slightly offbeat alternative scenario in our projections, rather than realistic targets, then, clearly, more action is needed in these areas. all in all, it is essential that policy makers fully understand that the window of opportunity that we have now, will not last forever. we should be aware of the fact that we still have a lot of convincing to do. earlier on i have likened the ageing problem to an earthquake. contrary to a regular earthquake, however, we can predict almost exactly when and where it will hit us. in addition, the quake will not take the form of a big bang but will reach its full impact only very gradually : its disrupting ripples will be felt throughout the following decades. and although it is hard to give precise estimates of the amount of damage that it will do, this is the kind of earthquake that is certain to shake the very foundations of our modern welfare states. it is our task, as economic researchers, policy advisors and, ultimately, policy makers, to make sure that, by the time ageing really starts to kick in, these foundations can withstand the blow. i firmly believe that conferences like this one bringing together a host of distinguished researchers from both sides of the atlantic are a crucial step in reaching this objective.

guy quaden : ageing and welfare systems : what have we learned? introductory speech by guy quaden, governor of the national bank of belgium, at a conference organised by ceps in the framework of the european network of economic policy research institutes ( enepri ), in brussels on 24 - 25 january 2003. * * * ladies and gentlemen, i am very pleased to welcome you all at the national bank of belgium and to open this ambitious twoday conference on population ageing. the steadily increasing life expectancy in our countries is very good news but, as you know, combined with the dramatic decline of birth rates after the baby boom in the 1950s and the 1960s it implies that populations in a large number of countries are ageing rapidly. ultimately, the elderly dependency ratio will rise gradually but substantially. to put it more clearly : our children will have to cater for a growing number of pensioners. even if ageing pressures will in most cases only culminate from the second decade of the current century onwards - when the baby boom generation starts to retire from the labour market - the economics profession has a long - standing interest in population ageing. as early as the 1980s, individual authors or international bodies singled out ageing as one of the biggest economic challenges of the future. the first task at hand for economic researchers was obviously to estimate the size of the problem : what is it that we are facing? how bad will it be? most studies initially focused on the pensions problem and the budgetary impact of ageing. two remarks in that respect. – subsequent studies revealed that, contrary to what is still often thought, pension expenditure is not the only budgetary item that will soar because of population ageing. the ageing problem is as much a health care problem, for instance, as it is a pension problem. on the other hand, one should not forget that ageing will have a beneficial effect on other spending categories like child allowances and education expenditure. hence, the net budgetary cost of ageing can be somewhat lower than the projected increase in pension and health care spending. all in all, even taking into account the large degree of uncertainty inherent in this kind of exercise, ageing will undoubtedly weigh substantially on future governments'budgets. – one should refrain, however, from simplifying a problem as complex as population ageing into a kind of bill for the governments to pay. ageing will have a substantial impact on a wide range of economic variables - without