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EU urges governments to raise retirement age

08 July 2010 10:31 (UTC +04:00)

Baku - APA-Economics. European governments need to raise the retirement age because workers are living longer and their pension systems could implode, the European Commission said Wednesday, AFP reported.

The European Union’s executive arm formally launched a debate already raging in several EU countries that are planning unpopular measures to bring down huge public deficits and keep their pension systems afloat.

"The number of retired people in Europe compared to those financing their pensions is forecast to double by 2060 -- the current situation is simply not sustainable," said EU social affairs commissioner Laszlo Andor.

"The choice we face is poorer pensioners, higher pension contributions or more people working more and longer," Andor said at the official presentation of a "green paper" on pensions.

Weak growth, ballooning national debt and higher unemployment "have made it harder" to make good on pension promises and "more urgent" to reform them, the commission paper says.

In the past 50 years, life expectancy in the European Union has risen by about five years and could increase by another seven years by 2060, the commission says.

At the moment there are four working-age people for every person over 65 in the 27-nation EU. That ratio will drop to two for every person over 65 by 2060, the commission says.

On average, Europeans retired at the age of 61.4 in 2008.

This compares to 65 years for workers in the United States and 70 years in Japan. In the 31-nation Organisation for Economic Cooperation and Development, the average retirement age for men is 63.5.

Andor denied "unfounded rumours" that he was calling for the retirement age to be raised to 70 in Europe.