Netherlands must better prepare for an ageing EU
Europe is ageing at a rapid pace. The proportion of pensioners in Europe will roughly double over the next thirty years. Without intervention, this will have a negative impact on the Netherlands. This is the conclusion of the Netherlands Scientific Council for Government Policy (WRR) in its advisory report European ageing in focus. Dealing with pension and budgetary risks published today.The WRR advises that the Netherlands should prepare for a much greyer European Union.
The Dutch government must aim for European policies that stimulate and enable more and longer working for as many people as possible. This makes European countries better able to withstand the coming ageing. The Netherlands must also protect itself against the possible negative consequences of European ageing.
Exceptional position
Ageing will put the economies and pension systems of European countries under great pressure in the coming decades. Although this also applies to the Netherlands, the country finds itself in an exceptional position. The Netherlands is ageing relatively little, and has much larger pension savings than almost all other EU countries, which finance their pensions from current government budgets. This means the Netherlands is relatively well prepared for the coming period of population ageing.
Risks for the Netherlands
Despite this exceptional position, European ageing also poses risks for the Netherlands. For instance, pressure on government budgets and economies of EU member states can lead to mounting debt burdens, economic stagnation and additional tensions between member states. This can undermine the effectiveness of the EU, put European cooperation and the euro under pressure, and drive up inflation. At the same time, the Dutch exceptional position within an ageing Europe may lead to the Netherlands becoming more politically isolated. European ageing must come more into the focus of Dutch policy and politics to be able to avert such scenarios.
Advice for a future on an ageing continent
The Netherlands lies at the heart of a rapidly ageing continent and is economically and politically strongly intertwined with other EU countries. Our current and future prosperity and security therefore depend on a strong European Union that can withstand the consequences of ageing. Therefore, the WRR gives three pieces of advice to the government:
- Prepare for an ageing European Union;
- steer at EU level towards stimulating and enabling more and longer working;
- protect through domestic policy against negative consequences of European ageing.
For instance, to prepare, the Netherlands could monitor not only its own ageing but also that in European partner countries. Strengthening trade and investment ties with still relatively young countries outside Europe can help dampen the impact of European ageing. And within the EU, ageing-resilient European economies and more working should be a priority of Dutch efforts in EU negotiations.