Sir,

Klaus Regling hit the nail right on the head when he wrote that Europe has more of a retirement problem than an ageing problem. The economic and social policy implications of demographic change - higher pension expenditures, lower economic growth potential - would be much easier to shoulder if we were to simply accept the banality that longer lifespans mean longer working lives. If retirement age were to increase in proportion to life expectancy, thereby dividing the extra time proportionally between work and leisure, our pension systems and our growth potential would not be affected at all by dramatic increases in life expectancy.

 

Even welcome change requires adaptation, and in this case adaptation is made much easier by the equally dramatic improvements in health during recent decades. Our “problem” is of course not the increase in health and longevity - that would be a perverse idea. Our problem is our unwillingness to adapt to a world that has changed for the better.

 

Klaus Regling’s projections show quite clearly that the Lisbon strategy of adaptation will work - if only it were implemented. Some EU countries have done so, and their employment rates reach and even exceed the Lisbon targets, particularly among individuals aged 55-64. It can be done and two well-known counterarguments - that employing older people will kill jobs for the young, and that older workers are too burned out to be employable have been shown to be false. Experience in Britain, Scandinavia and Switzerland has demonstrated that neither of these old wives’ tales holds true.

 

Klaus Regling hit the employment nail, but there are a number of other nails that also need to be hammered home. One is low fertility, another is the root cause of demographic change. Some countries have experienced spectacular and sudden declines in their birth rates, which in just a few years have dropped by a half. This change is because societies want to give women and men equal rights, so it is a change for the better. But with all changes, it demands that we adapt our mindsets and our institutions; work and family need to find a new coexistence. Many countries have failed to adapt to this, but there are examples of successful adaptation that we can learn from. France has developed the école maternelle, Scandinavia has established a tightly woven net of child care facilities. Female labour force participation is high in these countries - as is the birth rate. In these countries, co-existence of work and family is a reality.