Prague, May 14th, 2009
President of the ECOFIN Council and Czech Minister of Finance Eduard Janota spoke today at the Brussels Economic Forum on “population ageing, the economic crisis, and their impact on the sustainability of public finances”.
This major economic conference of the European Commission took place on 14 and 15 May 2009 and focused on the following issues:
Europe and the global response to the crisis;
the financial crisis and the design of a new rule book;
population ageing, the economic crisis, and their impact on the sustainability of public finances.
At the forum, Minister Janota spoke on the panel dedicated to population ageing and its impact on long-term sustainability of public finances in the context of the current crisis. Other speakers on the panel included Swedish Minister of Finance Anders Borg, Portuguese Minister of Finance Fernando Teixeira dos Santos and Commissioners Joaquín Almunia and Vladimír Špidla.
Minister Janota said that the Czech Presidency is aware of the impacts on and risks for public finances accompanying the ageing of the population. It has thus included this issue among its priorities in the area of economic policy. The long-term sustainability of public finances is even more important during the current economic crisis, given the growing public deficits, debts, as well as the potential slowdown of long-term economic growth. Minister Janota also mentioned the ECOFIN Council conclusions on the quality and long-term sustainability of public finances adopted on 5 May 2009. The Minister highlighted that in the next 5-10 years necessary reforms will have to be carried out with the aim of securing long-term sustainability. The three-pillar reform strategy is still valid (reducing public debt, increasing employment and productivity; and carrying out reforms of pension and healthcare systems).
Minister Janota thanked the Economic Policy Committee and the European Commission for the drafting of the Ageing Report, providing an overview of anticipated public expenditures covering pensions, health care, long-term care, education, and unemployment benefits during 2008-2060.
To reduce the impacts of population ageing on the long-term sustainability of public finances, the Minister believes that it is necessary to carry out reforms of pension and health-care systems. The Minister also mentioned the recent parametric reform of the Czech pension system which has ranked the Czech Republic among the 6 EU countries generating the biggest reform effort since 2006. It was due to the previous Ageing Reports (2001, 2006), containing a critical evaluation of the Czech Republic, that the domestic political debate on the pension reform began. In this context, the Minister considers it necessary to hold a discussion and exchange best practice between the EU Member States, as well as engaging in dialogue and securing coordination between individual formations of the EU Council.
Spokeswoman of the Ministry of Finance
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