Is Europe facing up to the challenge of ageing populations?
[4 March 2003 - "The Economic and Budgetary Implications of Global Ageing" Conference - Brussels] A speech by Pedro Solbes, Member of the European Commission responsible for Economic and Monetary Affairs -- In coming decades, the EU and its accession countries will undergo unprecedented changes in the size and age structure of its population. Fertility rates are expected to remain well below the natural replacement rate, and life expectancy is projected to continue to increase by about one year each decade. Migration flows are hard to predict, but in the absence of major policy changes, they are unlikely to reverse the overall demographic pattern.

According to the central baseline scenario of Eurostat, the main impact is not on the size of the total population, but rather on the number of persons of working age. Whilst the population of working age (15 to 64) in the EU will fall by some forty million persons in the coming fifty years, the number of elderly persons aged 65 and over will increase by about the same number. As a result, the old-age dependency ratio will double from 24% in 2000 to 49% in 2050. What this means is that today there are 4 persons of working age for every elderly person, but by 2040 this will have dropped to only 2 persons.

These projections provide an aggregate snapshot for the EU as a whole. More worrying changes are forecast in some countries where fertility rates have fallen the most. Also, policy makers must bear in mind that the downside risks are considerable.