European Union member states should balance their budgets in the medium-term to defuse a “time-bomb” in their pension systems being threatened by ageing populations, the bloc’s executive arm warned on Thursday.
In a report on future of EU public finances, the European Commission said the public debt in the bloc would more than treble to 200 percent of gross domestic product in 2050 unless governments implement reforms urgently.
“Unless most member states do something serious about defusing the pension time-bomb, it will go off in the hands of our children and grand-children, presenting them with a burden that is simply not sustainable,” said EU Monetary Affairs Commissioner Joaquin Almunia.
The report said that declines in fertility rates, the retirement of post-war “baby-boom” generation and increasing life expectancy would put an unbearable burden on public finances in many EU countries if they shy away from reforms.
European Commission warns of pension time-bomb