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‘Ageing’ Europe has least sustainable finances
According to a new ranking of 163 countries, Europe’s big economies, including France, Germany, Italy, Sweden and the United Kingdom, are the most exposed to fiscal risk due to their ageing populations, substantial levels of debt and high public spending on health and pensions.
The Fiscal Risk Index, developed by risk analysis and mapping firm, Maplecroft, identifies countries that will come under increasing economic pressure in future years due to low birth rates, high life expectancy and state commitments to look after ageing populations.
In a report from June 2009, the IMF suggested that the fiscal implications of ageing populations could dwarf the impact of the recent financial crisis in terms of national accounts. It estimates that the net present value of the financial crisis is about 11% of what ageing related spending will cost.
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