Commentary: Confronting the Demographic Challenge: The 2006 EU Strategy on the Demographic Crisis

Abstract

The European Union is facing a fundamental demographic transition. Centuries of scientific, economic and social progress have helped reduce mortality among the young and middle-aged and have expanded our choice of lifestyles. Today the average European lives a longer and healthier life than his or her ancestors. This is a huge historic accomplishment to be celebrated. Europe is the first major world region facing such population ageing. The political challenges it brings are new, but not unforeseen. Public policy issues include access to quality public services and health care, the sustainability of public finances, as well as intergenerational solidarity and equity. The ageing of Europe’s population is no longer an abstract future scenario: it is a fact that is becoming increasingly evident today as the baby boom cohorts born between 1945 and 1965 reach retirement age. This will result in the number of persons of working age declining considerably over the coming two decades while the number of pensioners increases. If current projections prove correct, not only will the resources needed to support a growing number of elderly people be ever scarcer, but the needs of the elderly in terms of health care and pensions will rise. European policymakers have a window of opportunity of around one decade during which employment can still grow, thanks to higher labour force participation. During this time, measures need to be taken to tackle the challenges of ageing.