Europe : Population ageing threatens decades of decline for European economies

Europe’s pensions and healthcare systems could collapse and the region’s economic growth will falter unless governments, businesses and citizens take action to address the challenge of population ageing, according to Old Europe: Population ageing and the looming pensions crisis, a new report by the Economist Intelligence Unit. The report, which includes a barometer of demographic risk in 20 European countries, shows that southern Europe, Austria and the Czech Republic face the greatest threat from population ageing, but that far-reaching reforms are required across the region to avert the threat of economic decline. Declining birth rates and higher life expectancy have made population ageing a global issue, but the problem is particularly severe in Europe. The region’s elderly dependency ratio (the proportion of people over 65 to people of working-age) is set to double by 2040 – a change that raises difficult questions about the future of retirement funding. Most Europeans will have to work longer and save harder before retiring, the report concludes. Demographic change also has major implications for corporate Europe. In a survey of 167 senior European executives conducted for this report, 60% of respondents said their businesses had been damaged by under-performing company pensions. A further 80%