Brussels, 27 June 2024
Ladies and Gentlemen,
We are navigating towards the end of this Commission’s term.
As the College member responsible for Democracy and Demography, this event provides me with an excellent opportunity to reflect on the legacy we are building in light of the significant demographic challenges we face today and, in the decades ahead. So, my thanks to the colleagues of DG ECFIN and DG EMPLOYMENT, as well as all the distinguished speakers here today for making it happen.
Under the leadership of President Von der Leyen, we created a portfolio dedicated to democracy and demography. The first ever! This shows our strong commitment to addressing Europe’s most pressing challenges. Over the last 5 years, we have laid a solid foundation focusing on broad range of aspects that are linked to demographic change. From employment, skills and nurturing talent to health and care, to pensions, legal migration and family policies.
Europe is experiencing a demographic revolution. Our age pyramid is changing, with more people aged over 65 and a significant number over 80. Children born today are likely to live up to 100 years or more. This shift, coupled with lower birthrates inevitably leads to a shrinking population and workforce. It therefore demands a profound rethinking of our institutional, political, economic, and cultural frameworks, because they were built for shorter lifespans.
The rising number of older people led to the development of a “silver economy”. It focused on economic opportunities arising from their specific needs. However, this view limits our perspective. The “longevity economy” on the other hand, recognises significant increases in lifespan, aiming to make those extra years healthier, more productive and fulfilling. It values older individuals beyond their health needs.
The longevity society is about reshaping social and working lives to make the most of the extra time we have. And to start doing this from birth. We need policies for all ages that foster active and healthy ageing from a young age and across the entire lifespan. We must empower the younger generation to reap the full benefits of this opportunity. We must also value this new older generation and cherish their knowledge and experience. This approach breaks from seeing ageing as a burden to society. It promotes fairness across generations and a positive approach to longer life expectancy.
Let us now have a look at the recent Pension Adequacy Report. It projects decreasing pension replacement rates in most Member States over the next four decades, despite longer careers and higher retirement ages. Women continue to be particularly affected by poverty in old age due to persisting gender gaps during their working lives. This issue needs continuous attention and action.
Today’s young Europeans face a triple burden: higher social security contributions, lower pensions, and more fragmented careers impacting their pension entitlements. Ensuring the adequacy and long-term sustainability of social protection requires investing in active and healthy ageing and prolonging working lives. This means developing flexible work arrangements, flexible retirement, and other incentives.
Now we move on to the 2024 Ageing Report. Life expectancy in the European Union has been rising steadily. The population is ageing rapidly: By 2070, the share of people aged 65 and above is projected to rise from 21% to 30%. And those aged 80 and above will more than double, from 6% to 13%. This demographic shift will significantly increase the old-age dependency ratio, presenting profound implications for our social protection systems, if they remain designed as they are today.
Age-related public spending, including pensions, healthcare, long-term care, and education, is projected to rise substantially. To mitigate the fiscal impact of an ageing population, policies promoting longer working lives and healthy ageing are essential. It will become necessary to link retirement ages to life expectancy, as many Member States do already, and to encourage higher employment rates among older workers and women.
Demographic change is increasingly recognised as a fundamental aspect of our policy frameworks. Not only in the two reports we will discuss today, but also in the recent European Semester Package, or the report by Enrico Letta on the future of the internal market. This shift underscores that demographic change is the third transition underpinning the green and digital transitions. Addressing demographic change supports our ambitions to achieve economic sustainability and remain competitive. It affects various areas from fiscal sustainability and public expenditure on pensions and healthcare to labour shortages, long-term care, skills, and lifelong learning. It affects our very democracy and impacts our ability to show that democracy truly delivers for people!
The European Commission plays a critical role in supporting Member States through these demographic shifts. In October last year, at the request of the European Council, I have presented a Demography Toolbox, which outlines available instruments for all levels of governance – be it national, regional, or local – to address demographic challenges. The overall objective is to keep our Union competitive. I think it goes without saying that there is no ‘one-size-fits-all’ solution. Demographic profiles throughout the European Union and within countries differ significantly. Some suffer from brain drain, where others benefit from the movement of talent. Some regions are shaped by migration patterns, some need highly skilled workers, some have housing problems… We must work together with all relevant stakeholders to create a society where everyone, regardless of age, can thrive and enjoy the benefits of demographic change.
Our focus must be on creating resilient systems that can withstand demographic pressures. This involves promoting healthy and active ageing to reduce the burden on our care and healthcare systems and ensure that older citizens enjoy a good quality of life. It is essential to invest in care and healthcare systems, integrating advanced technologies, and expanding long-term care services.
To support longer working lives, we must adapt our workplaces with flexible work arrangements and retirement options. Employers need to recognise the value of older employees and adapt roles to suit their capabilities. Lifelong learning and re-skilling programs are also vital to keep workers of all ages competitive and employable.
Urban planning must evolve to create age-friendly environments that promote active ageing. Cities and communities should be designed to be accessible and inclusive for all ages, encouraging intergenerational interaction and community cohesion.
Ladies and gentlemen,
I am proud of what we have done so far. But I am also aware of the road ahead. Demography is very much about statistics, about the scientific data! The good thing is that we can predict the challenges we will have to face at some point. Some are manifest already; some will become more acute in the years to come. I call on all policy makers to take up the challenge and to start engineering tomorrow’s longevity society.
I would like to acknowledge the invaluable contributions of my colleagues, Commissioner Paolo Gentiloni and Commissioner Nicolas Schmit, who will also address you today. Their insights and leadership on the economy and on social rights have been invaluable in addressing these complex issues.
That said, let us work together to transform the challenges of longevity into opportunities for a brighter, more inclusive Europe.
Thank you!
Source – EU Commission