somewhat hazy in the united states and japan. cuts in pension outlays ( e. g., increase in retirement age, reduced benefits and restrictions on early retirement schemes ) have been announced by a number of countries, as these measures are important for longer - term fiscal sustainability. ageing will also affect fiscal sustainability through rising health and long - term care expenditures, something that is coming to be realized with a lag compared to pension expenditures. the third factor is the weak macroeconomic environment, because lower wages and fewer jobs shrink the revenues from pension contributions. the recovery from the great recession is expected to gain momentum only slowly and continues to be unstable, as indicated by the latest downward revisions of growth prospects for the united states. the recovery is also unbalanced : the advanced economies lag behind the emerging - market economies ; global imbalances do not appear to be on the way of being reduced ; in several countries households are highly indebted. bis central bankers ’ speeches nor is the medium - term outlook for the world economy much brighter. in advanced economies public debt is high. the pressure of emerging market economies on energy and commodity markets creates upward risks for inflation. labour market conditions are expected to improve only slowly and there is a concern that structural unemployment might increase. geopolitical risks could remain high. if the public pension sector is not yet out of the woods, defined - benefit ( db ) pension schemes are in no better shape. the demographic trends and the weak macroeconomic environment have had severe repercussions on them too. what ’ s more, db plans have been put under pressure by the huge correction in asset prices triggered by the global financial crisis. the impact of the plunge in share price indices in 2008 has been magnified by the sharp decline in the yields on benchmark government bonds, which provide the backbone of the discount factors used to value future liabilities. as a result, since 2008 the funding gaps of db plans have widened significantly across the board. according to oecd estimates, for more than 2, 000 publicly traded companies headquartered in 15 countries, the median underfunding rate worsened from about one eighth in 2007 to one fourth in 2009. since the autumn of 2010 the situation is likely to have improved but only slightly, owing to the low level of interest rates. particular concerns have been raised about the sustainability of db pension plans for public sector workers. there is evidence that in a number of advanced countries these plans produce potentially large net unfunded

- are only growing a few percentage points faster than the average for the old countries ; an average that furthermore is being pulled down by the poor performances of germany, france and italy. from this we can come to at least two conclusions : firstly, poland, hungary and the czech republic, which already have fairly substantial public expenditures for their income level, should take care not to end up in the same situation as germany, france and italy, with high expenditures, large deficits and considerable needs for reform. secondly, both new and old countries need a broader injection from the enlargement for their economic performance. mobility for goods has been one of the key factors behind the new member states'growth. when the process towards eu entry was initiated in the mid - 1990s, the majority of the eu ’ s barriers to trade for the future member states were abandoned through the europe agreements. this resulted in one of the most dramatic and least publicised changes in trade in modern time - far more significant for most eu countries than, for instance, trade with china today. the future member states, which previously had been among europe ’ s most closed economies, were transformed in a few years to the most open economies in europe - foreign trade corresponds to more than 130 per cent of gdp in hungary and the czech republic, more than countries of an equivalent size in the eu, such as austria and sweden. the eu became completely dominant in trade, while russia and the former soviet republics shrank to become a relatively small trading partner. the countries ’ share of the old eu countries ’ trade rose quickly. for sweden the eight new member states have been the trading partners that have always increased their share steadily from the beginning of the 1990s - through the asian crisis and the bursting of the it bubble - and that today comprise 5 per cent of sweden ’ s foreign trade, i. e. on a par with france and more than double china ’ s share. all indications suggest that the trend will both continue and deepen. the proportion of intermediate goods ( components ) produced in the new member states on behalf of western companies is becoming an increasingly large part of trade, as is the proportion of goods with higher technological content from the new member states. mobility for goods has gone hand in hand with mobility for capital. several studies of the balance of earnings and costs associated with enlargement ( e. g. from the european commission and the independent institution cepr ) have high - lighted increased investment as one of the most significant advantages of