FINANCE

Spending on pensions within limits

spending-on-pensions-within-limits

Projected state expenditure on pensioners in Greece remains within the European target, as it is expected to decline from 15.7% in 2019 to 11.9% in 2070, according to a European Commission report.

This reduction, amounting to 3.8 percentage points of gross domestic product on an annual basis, may be satisfactory, however it is vulnerable, as an extraordinary event such as the global health crisis would lead to another derailment.

The report also mentions that state spending on pensions soared to 18% of GDP in 2020, due to the pandemic and the additional obligations generated in the social security system due to court decisions (retroactive payments).

That is why – given the liquidity available – the Commission analyzes a series of scenarios besides the baseline one in this year’s report, so as to highlight that the sustainability of public finances in the European Union can be better monitored and protected if its analysis is based on reliable and comparable information for possible challenges, including those originating from the demographic changes anticipated over the coming decades.