The creation of an EU pensions union

Over the recent years, a wide variety of policy areas has been becoming increasingly internationalized, including the area of old age pensions. Social security, on the other hand, the area to which pensions in a large number of countries belong, seems to insist on remaining a national matter. A statement heard in many circles is that ‘Europe should not interfere with our pensions.’ This is usually followed by: ‘We can manage very well on our own, thank you; we don't need Europe for that.’

The majority of the political representatives and many pension funds seem to share this attitude. The question arises whether it is really possible – or, for a number of reasons – desirable to exclude the European Union when designing a national pension system. Is it really true that ‘Europe’ should ‘keep its nose out’ of ‘our’ pension systems? As is often the case, matters are not as black and white as they may seem, and a different perspective could cast new light on the subject.

The Member States of the European Union (EU) not only can, but really must conclude that the influence of the EU on national pension systems is very necessary. Take as an example the problem of setting the pension age in a given country: is it not strange that in one country this can be set at 55, and in another EU country at 67? This disparity is particularly troublesome given that in many countries, including those with a lower pension age, a large part of the population is rapidly reaching the age of retirement. Furthermore, many EU countries share the same currency, interlinking the sustainability of their economies in which pension expenditure is a large part of the GDP.