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'Too much emphasis on austerity' says Laszlo Andor

brussels bureau

'Too much emphasis on austerity' says Laszlo Andor


“The crisis has lasted for too long and there is too much emphasis on austerity measures. We need more financial and political solidarity in Europe”, says Laszlo Andor, European Commissioner for Employment, Social Affairs and Inclusion.

He was speaking at a news conference at the opening of the European Year for Active Ageing and Solidarity between Generations 2012, in Copenhagen, Denmark.

The commissioner stressed that a sustainable economic recovery in the European Union depends on a “more balanced approach and more solidarity and cohesion among member states”, because to end the crisis Europe cannot rely only on austerity measures.

Austerity has been central in the agreements established between EU and member states receiving bailout packages, namely Greece, Portugal and Ireland, but also in reforms approved by countries facing contagion on the sovereign debt financing level, like Italy and Spain.

“Purely by cutting wages, competitiveness does not improve. We have also to invest in the labour force and that is why it’s absolutely central to invest in developing lifelong learning opportunities, which in a lot of member states, like Greece, is available to 15 percent or less of the working force,” said the commissioner.

Along with falling wages, the EU faces its highest unemployment rate for the last 20 years, reaching 9.8 percent in December 2011, meaning that 23 million people are looking for a job. Also 23 percent of its population — 115 million people — face the risk of poverty and social exclusion.

Live longer, work until later

But one unquestionable reality is that the European population is aging and in five years there will be more pensioners than young workers.

“We have to create a link between life expectancy and retirement age. If people live much longer than 30 years ago, we cannot maintain the same retirement age because there would not be a balance between those working and those in retirement and elderly people would face very low incomes and would face impoverishing risk,” said Andor.

Nevertheless, retirement ages and pensions will remain a matter of decision for each individual member state, although the European Commission is working on a white paper on pension system reform to amplify cohesion within the 27 EU member states.

“Europe cannot have a common standard in these areas because of its member states’ very diverse demographics, labour market conditions and pension systems, so every state member has to decide on its own, if possible in consultation with all stakeholders and social partners”, explained the commissioner.

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