Monday, June 11, 2012

Europe's Pension Crises

European countries are unable to pay promised pensions. A new crises is looming.

According to Wall Street Journal most European Union countries owe more than twice their annual gross domestic product in pensions promised to current workers and retirees. As governments scale back benefits, companies and individuals face a rising burden. But saving for old age could prove a crushing blow to growth.

There are three types of European pension shortfalls. First, from governments, the EU's main pension providers: Sweden, Denmark and Poland set aside money to part-fund state pension liabilities, but in most countries they are financed by tax contributions.

Geir Solem
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