Recasting Pensions in Europe: Policy Challenges and Political Strategies to Pass Reforms

Through a comparative perspective, the present paper sheds light on recent policy trends and political strategies to reform pensions in Europe. Pension reforms are a risky process. Even when reforms pass, their implementation is uncertain. Risks of partial or total reversal are always present. After the brief introduction, Section one provides a comparative review of the measures passed in different European countries in the aftermath of the recent economic downturn. Many of these measures resemble what was included in the Swiss Old Age Security 2020. The increase of the pensionable age, its equalization between men and women, and the increase of the system revenues have been part of many reform packages across Europe. While in the following we refer to broad reform trends, we mainly focus on three cases: Denmark, Germany and Italy. They are representative of different pension models and different political contexts . All have passed major reforms in the last two decades – before and after the spread of the financial crisis – with different processes of implementation. The key concepts we use to assess policies are reform reversal and stability. Section two focuses on the main traits of the politics of pensions. Through the analysis of the same three countries we see that reform packages are often politically fragile. Many European countries have experienced contingent agreements - between political and social forces - that tend to be contested in the longer-term. We refer to few major challenges to pro-reform consensus. The changing economic conditions, the emergence of new political forces, and the ongoing re-framing of policy priorities may weaken the pro-reform consensus. On top of that, reform packages are complex deals that are difficult to design and implement. Their multi-dimensional nature does often lead to problems of incoherence that weaken the political support for reform and provide room for further contestation. Here the key concepts we propose are those of inclusion or insulation as typical traits of the policymaking process. The brief comparative analysis seems to prove that the more inclusive is the policymaking, the lower is the risk of contestation in the longer-term. In the concluding section, some final remarks address the prospects for pension policy and politics in the context of population ageing and austerity.