Policy Areas

Finance minister Foss discusses economic impact of ageing population in Brussels

 Date:17/11/2004

On 16 November 2004, Finance Minister Per-Kristian Foss and his EFTA colleagues met with Finance Ministers from the EU (Ecofin) in Brussels to discuss the economic and budgetary implications of ageing populations. It is evident that ageing will negatively affect the outlook for both economic growth and public finances and that most countries are facing major challenges in this area.

The Ministers addressed the large projected changes in the size and age structure of the EU and EFTA populations. The old-age dependency ratio is expected to increase substantially in the years after 2010, as life expectancy increases and the population of working age becomes smaller. This will lead to a significant upward pressure on public spending on pensions and health care. These prospects would necessitate significant reforms, including reforms of pension and health care systems as well as measures to increase labour supply, especially of women and older workers. The effective retirement age needs to be raised.

The Ministers noted that the situation differs among the countries, but the overall picture is that further reform is needed.

Finance minister Foss underlined the fact that Norway – despite the present favourable budget position – will have to tighten fiscal policies considerably in the future without reforming the present pension system. The Government will shortly present a White Paper to the Parliament on pension reform, based on proposals from a high-level Pension Commission.



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