It's The Same Old Problem
	Across Europe, aging populations and looming pension woes are forcing governments to make unpopular decisions

Posted Sunday, October 26, 2003; 14.36GMT
FRANCE In the face of a series of summer strikes, Prime Minister Jean-Pierre Raffarin's government increased from 37.5 to 40 the number of years state employees must work to qualify for a full pension. The figure will rise to 42 years by 2020. Yet the measures still fill less than half the 343 billion financial hole predicted for state pensions between now and then, raising the specter of higher contributions in the future.

ITALY Last week, the country's three major unions led a half-day general strike, and more than a million marched in protest at Prime Minister Silvio Berlusconi's plans to increase from 35 to 40 the number of years state employees must work to get a full state pension. Berlusconi also wants to raise minimum retirement ages from 57 to 65 for men and 60 for women. Unions call the proposals "immoral" and vow further disturbances until the government backs down.

U.K.The basic state pension absorbs just 5% of GDP, about half the European average. Various supplements target the poorest retirees, but company funds have been struggling in the stock slump and labor unions — over Tony Blair's objections — want to compel employers to contribute to retirement accounts.

SPAIN The Spanish have one of the highest contributory state-pension schemes in Europe, with employers accounting for 26% of the total contributions and employees 5.5%. But the country's unemployment rate has fallen from almost 25% in 1994 to just under 12% now, and by having more workers contributing to social security, there is more money to cover pensions.

	The Burden Of Youth [May 20, 2002] Europe's pension commitments are going through the roof. And young people will be stuck with the tab Is Germany Finally Bouncing Back? [Sept. 8, 2003] The German economy shows signs of improvement. But the jobless aren't buying it Gambling With the Future [Feb. 10, 2003] U.K. firms put employee pensions into stocks. The bear market may force them to retire the idea More Related Items | Search all issues of TIME Magazine