EU report warns of ageing problem for Europe

The population of the EU is projected to reach 517 million in 2060 from the current 502 million; nearly one third of the citizens will then be aged 65 or over, says a report on Tuesday. The 2012 Ageing Report, published by the European Commission today, analyses demographic trends and its consequences in Europe. According to the report, the segment of those aged 15-64 is projected to decline from 67% to 56% by 2060. The segment of those aged 65 and over is projected to rise from 17% to 30%. As a consequence, the EU would move from having four people of working-age to each person aged over 65 years to about two people of working-age. The total number of workers is projected to decline by 15.7 million to 195. 6 million in 2060. The decline in the workforce will act as a drag on growth and per capita income, with a consequent trend decline in potential growth. Moreover, the demographic changes are expected to have substantial consequences on public finances in the EU. On the basis of current policies, age-related public expenditures (pensions, health-care and long-term care) are projected to increase by 4.1 percent to around to around 29% of GDP between 2010 and 2060. Public pension expenditure alone is projected to rise by 1.5 percent to nearly 13% of GDP by 2060.