Council urges action on challenges arising from an ageing population

The Council of Ministers of the European Union has urged Member States to act on the fiscal sustainability challenges arising from an ageing population. The conclusions draw on the main findings of the 2021 ageing report and call on member states to address the economic and budgetary consequences of ageing.

The conclusions stress that ageing populations pose a significant challenge for the long-term sustainability of public finances. The Council notes that government debt levels have risen due to the Covid-19 crisis and that they are expected to stay high for some time. At the same time, it underlines that premature withdrawal of fiscal support should be avoided to preserve longer-term fiscal sustainability. According to the report, by 2070 there will be less than two working-age persons for every person aged over 65, while currently there are three. That means that, in the long term, GDP will only be able to grow based on labour productivity.

The report projects an increase in age-related public expenditure (pensions, healthcare and long-term care), with numbers varying depending on productivity growth, demographic developments and the macroeconomic situation.

In this context, the Council called on member states to address agerelated spending by raising employment rates and productivity, tackling the gender gap in the labour market, and adapting pension, healthcare and long-term care systems.