Time Horizon of Social Policy too Short

Social welfare expenditure in 1991 rose notably faster than nominal GDP, attaining a share of 27.4 percent. Despite booming business activity financial constraints in the social budgets have not eased. Higher tax and contribution revenues gave rise to new claims on expenditure apparently covered by the "growth dividend". Thus, old-age pensions were raised twice beyond the usual annual adjustment thereby pushing up expenditure permanently above the baseline trend. At the same time, long-term imbalances of the insurance system have still not been tackled.