Pan-European Pension System, Possibility or Fiction?

Open Access

Abstract

Today Europe has different pension systems. According to the history of forming, there are some based on the Bismarck model, like in central and southern Europe; and others on Beveridge's model, like in UK, Ireland, Netherlands and Cyprus; and those based on the Scandinavian model in the Scandinavian countries. In the past two decades there are pension reforms that are conducted in the eastern European countries based on the World Bank model. Most Western European countries did not reform their pension systems. In the past two decades they have made only adjustments but not reforms. Some countries of the EU, like Greece, France, Spain and Portugal, have problems with the financing of their pension systems and also they have worker strikes over this issue. Conversely, Netherlands, UK, Sweden, Ireland and Denmark do not have those kinds of problems. The question is what is the difference in the pension models that makes the models of some countries to be more sustainable and others not. What are the differences in the models? On the one hand, some models can provide better solutions for the elderly population and, on the other hand, some models are not enough suitable for the future retirees. If we know that the EU is a market that is based on the freedom of movement of capital, goods and labor force, the question is, if EU countries do not have similar or connected pension systems, do we have a problem with freedom of movement of the labor force within the EU? In a time of crises, it is notable that in the USA, for example, the equality of the pension rights made it easier for the people to move from one region to another and to mitigate the effect of the crisis. Is it possible to have the same situation in the EU? Do we have to think of a Pan European Pensions System? What will be the features of that kind of system?