Green Paper "Confronting demographic change: a new solidarity between the generations"

The Commission has published a Green Paper on demographic change and highlighted the challenges the European Union has to confront: falling populations, continuing low birth rates and continuing increases in longevity.

ACT

Communication from the Commission. Green Paper "Confronting demographic change: a new solidarity between the generations" [COM(2005) 94 final - not published in the Official Journal].

SUMMARY

The Commission's Green Paper presents the various challenges that the EU has to confront to reverse demographic decline and the weak natural population increase. It considers that to meet this challenge, the Lisbon Agenda must be resolutely implemented, in particular those policies focusing on getting people into jobs, on innovation and increasing productivity. It is also urgent to put in place birth-friendly policies and to address the possible contribution of immigration in a balanced way.

The Green Paper stresses that it is also necessary to continue modernising social protection systems, especially pensions, to ensure their social and economic sustainability and to enable them to cope with the effects of demographic ageing.

The causes of demographic change

The demographic changes confronting the EU are the result of three basic trends:

• continuing increases in longevity as a result of considerable progress made in health care and quality of life in Europe;
• the continuing growth in the number of workers over 60, which will stop only around 2030, when the baby-boomer generation will become "elderly";
• continuing low birth rates, due to many factors, notably difficulties in finding a job, the lack and cost of housing, the older age of parents at the birth of their first child, different study, working life and family life choices.

The structure of society is also changing radically. Family structures are changing: there are more "older workers" (55-64), elderly people (65-79) and very elderly people (80+), fewer children, young people and adults of working age. Besides, the bridges between the various stages of life have become more complex: this is particularly the case for young people, who are experiencing certain life events later (e.g. graduation, first job, first child).

The challenges of European demography

Public policies must take these demographic changes into account in all policy areas concerned. We will have to not only reach but to exceed the objective in the Lisbon Strategy - an employment rate of 70 % - to compensate for the expected drop in the working age population.

In this context, a low birth rate is a challenge for the public authorities. Europeans have a fertility rate which is insufficient to replace the population, as a result of obstacles to private choices: late access to employment, job instability, expensive housing and lack of incentives.

Immigration from outside the EU could help to mitigate the effects of the falling population between now and 2025, although it is not enough on its own to solve all the problems associated with ageing and it is no substitute for economic reforms. This means that the admission mechanisms for third country nationals must be managed effectively and transparently, and proactive integration and equal opportunities policies must be ensured.

Demographic changes are creating a new society: ever fewer young people and young adults, ever more older workers, pensioners and very elderly people. New forms of solidarity must be developed between the generations, based on mutual support and the transfer of skills and experience.

The EU must accept that young people are becoming a rare resource and are encountering difficulties in integrating in economic life, notably the unemployment rate, the 'risk of poverty' (i.e. a net income less than 60 % of the average) or discrimination on the grounds of their age and lack of occupational experience.

Anticipating changes such as improving the quality of jobs, the working environment or workers' health will help us to manage the working life cycle better. It will also be necessary to develop incentives to change people's behaviour with regard to older workers and to combat discrimination.

The number of elderly people will increase significantly after 2010 and until around 2030 (+ 37.4 %). They will be more active and in better health and they will also be better off, having been more likely to build up a full pension, and will have more savings than their predecessors and their children. They may want to participate actively in social life, (in particular in the voluntary sector). They may also wish to continue working or to combine part-time work with retirement, a trend that is developing in the USA.

With life expectancy increasing all the time, there is an ever-rising number of very elderly persons. Families alone will not be able to solve the matter of caring for these people and appropriate care will be needed; today this care is provided by families and particularly by women. Families must therefore be supported to a greater extent. This is where social services and networks of solidarity and care within local communities come in.

The role of the EU as it confronts demographic change

To confront demographic change, the Green Paper considers that the EU should pursue three essential priorities:

• return to demographic growth. Thanks to the determined implementation of the Lisbon agenda (modernisation of social protection systems, increasing the rate of female employment and the employment of older workers), innovative measures to support the birth rate and judicious use of immigration, Europe can create new opportunities for investment, consumption and the creation of wealth;
• ensure a balance between the generations in the sharing of time throughout life, in the distribution of the benefits of growth, and in that of funding needs stemming from pensions and health-related expenditure;
• find new bridges between the stages of life: an increasing number of "young retirees" want to participate in social and economic life. Study time is getting longer and young working people want to spend time with their children. These changes alter the frontiers and the bridges between activity and inactivity.

With a view to addressing all these questions, the Commission will be organising a conference bringing together all the players concerned on 11 and 12 July 2005. This conference will make it possible to collect the best practices of the Member States and other players.

The period of public consultation is open until 1 September 2005. The questionnaire is available at this site.

RELATED ACTS

Commission Report (2004). The social situation in the European Union [Not published in the Official Journal].

Last updated: 04.05.2005