The budgetary challenges posed by ageing populations : the impact on public spending on pensions, health and long-term care for the elderly and possible indicators of the long-term sustainability of public finances; 4/2001

Demographic changes in the coming decades will alter the size and age profile of populations in all EU countries, and pose significant economic, budgetary and social challenges. Although many such challenges will arise in fields such as pensions and health where primary responsibility rests with national authorities in accordance with the subsidiarity principle, there are considerable gains from analysing these issues together at European level. This report brings together the work undertaken in the past two years by a group on ageing populations attached to the Economic Policy Committee (EPC). It responds to various mandates of the Ecofin Council, and contains: revised projections, up to 2050, for spending on public pensions: this follows an interim report examined by the Council on 6 November 2000, which was prepared under the chairmanship of Professor Vittorio Grilli; projections for the impact of ageing populations on public spending on health care and long-term care for the elderly; some indicators, which, on the basis of the projections for age-related expenditures, could help in assessing the overall impact of ageing populations on the long-term sustainability of public finances.