Bismarck’s legacy

Europe’s pension ‘pyramid scheme’ is in terminal crisis. In Italy, public pension payments already account for 15% of GDP annually. Everyone knows that pensions are broken (and Britain’s are rather less broken than most other European countries ? public?pensions soak up only 6% of GDP) but no one wants to tackle it ??certainly not the politicians. Being one of those problems that can only get worse with time, the brave politician who finally decides to sort it out will probably be too late (and will certainly lose his job over it).

Everyone also knows that there are essentially only three variables: retirement age, working population and the size of our individual contributions. Since fiddling with one or even two variables is unlikely to do the job, we’re all going to have to recognise sooner or later that organised immigration has a contribution to make (along with having more children.?I’m doing my bit ??I’ve got three!).

No-growth greens are also going to have to tackle this one head on. They’re right to point out that stopping population growth in Europe is one of our most important post-war achievements but they must now face the real, political fact that?holding the population static can only accelerate the crisis and produce poverty for anyone dependent on state provision in the coming decades. The Economist had a good feature and a leader on this two weeks ago (but I’m afraid you need a subscription to see the story).