The 2009 ageing report : economic and budgetary projections for the EU-27 Member States (2008-2060).

In 2006, the ECOFIN Council gave the Economic Policy Committee (EPC) a mandate to update with the European Commission (DG ECFIN) its common exercise of age-related expenditure projections on the basis of a new population projection by Eurostat. The report presents the public expenditure projections covering pensions, health care, long-term care, education and unemployment transfers for all Member States. They are made on the basis of common macroeconomic assumptions endorsed by the EPC and of a 'no policy change' assumption, i.e. reflecting only already enacted legislation. The report reveals that for the first time in history, the vast majority of Europe's citizens are able to lead active, healthy and participative lives well into old age. At the same time, ageing societies bring new opportunities to innovative firms through the demand for new or adapted goods and services. However, the combination of ageing and low birth rates also poses major economic, budgetary and social challenges. Europe has started to prepare for these challenges, and encouraging progress has been made by some Member States, notably through reforms of pension systems and other social systems. However, without further institutional and policy changes, demographic trends are expected to transform our societies considerably, impinging on intergenerational solidarity and creating new demands on future generations. Such trends will have a significant impact on potential growth and lead to strong pressures to increase public spending.