Download French Young Bear Brunt as Population Ages

 PRESS RELEASE Embargoed: 15:00 11 March 2016 (GMT) French Young Bear Brunt as Population Ages Young people in France have suffered the fourth worst decline in their prospects over the past ten years, according to the first Europe-­‐wide Index of Intergenerational Fairness launched today by the UK-­‐based think tank the Intergenerational Foundation (www.if.org.uk). Six broad themes lie behind the worsening position of the French young: high spending on pensions, high government debt, unaffordable housing, low wages and lack of employment for the young, together with the rapid ageing of France’s population, which places a larger economic burden on younger workers. France spends more on pensions (12%) as a proportion of gross domestic product (GDP) than any other EU country, including Greece, Italy, Denmark or the United Kingdom. Although France has attempted to reform its state pension, intergenerational fairness seems certain to come under increasing strain from the country’s rapidly ageing population. In 2014 France’s debt reached 95% of GDP, double that of Sweden, Denmark and the Czech Republic. It meant that France’s figure is the eighth highest across the EU28. Under the Stability and Growth Pact, states should not have government debts greater than 60% of GDP, but France is one of 16 countries currently breaching this target. Average youth unemployment in France remains stubbornly high at 24%, more than twice adult unemployment (10.3%). Income levels of the young in France continue to be lower than the population average, with this indicator getting 0.05% worse since 2005. It means that French young people are the fifth most likely to be at risk of poverty or social exclusion of any country across the EU in 2014, and the risk of poverty has increased since 2007. The high ratio of French young people who have to spend more than 40% of post-­‐tax income on housing costs compared to the population average makes France the fourth worst European country for this indicator. If France’s youth democratic participation ratio is the third worst across Europe, beaten only by Lithuania and Ireland, this may be because young people see little to vote for. Since 1990 the number of over-­‐65s in France has risen and increased the old-­‐age dependency ratio – i.e. the needs of an increasing number of elderly people have to be met from the resources of a shrinking number of workers. Between 1990 and 2014 Europe’s dependency ratio increased by 36% from 20.6 to 28.2. France’s dependency ratio of 28.4 means that the country is very close to having only three people of working age for every person aged 65 and over, and the old-­‐age dependency ratio has increased by more than 7% since 1990. The over-­‐60s now consume 58% of all health spending in France, according to the Index. This is higher than the EU average of 54% and, if current consumption patterns continue, may mean that France will have to make difficult choices in the future to preserve the financial stability of its healthcare system. France currently spends 5.7% of GDP on primary and secondary education – almost 0.5% higher than the EU average. However, the amount it spent increased by only 0.06% between 2007 and 2011, lagging behind most of the EU’s other large economies. In terms of tertiary education investment, the country does much better as 44.3% of 25–34 year olds have participated in tertiary education. This is the eighth highest rate across the EU28. Green House Gas (GHG) emissions in France were on average lower than in many other EU countries in 2012. However, between 1990 and 2012, while Germany managed to reduce its emissions by over 40%, France only managed 24%. …/2 2/… The IF EU Index is a quantitative measurement of how the position of young people has changed across the EU over the 10 years between 2005 and 2014. Each indicator in the Index was chosen for its ability to reflect how countries treat younger and future generations. They include housing costs, government debt, spending on pensions, spending on education, youth unemployment, income levels, participation in democracy, access to tertiary education, poverty and social exclusion, investment in the future (R&D), environmental impact, usage of health services, and old-­‐age dependency. Across the rest of the EU, three broad themes appear to lie behind the worsening position of young people: the impact of the 2008 recession, particularly increasing government debt and youth unemployment; the rapid ageing of Europe’s population, which places a larger economic burden on younger workers; and the failure of too many EU members to secure their future competitiveness by transitioning to high-­‐skill, low-­‐carbon “knowledge economies”. The overall performance of the EU in terms of intergenerational fairness has therefore worsened since 2005, increasing 5.5 points from the base figure of 100 to 105.5. Angus Hanton, IF Co-­‐Founder, comments, “A key concern for the French government should be the emerging intergenerational crisis that IF has identified. High levels of government debt, a relatively high old-­‐age dependency ratio and spending on pensions cannot be paid for if younger workers are economically inactive. Furthermore the country’s inability to address this persistent unemployment means that many young French people are at a high risk of living in poverty or social exclusion themselves and therefore unable to fund the health and pension costs of the old. “These findings should act as a wake-­‐up call to policy-­‐makers. Younger generations are being systematically disadvantaged. We cannot expect the young to carry the burden of an ageing population if we do not give them the education, training, skills and opportunities required to become economically active citizens. It is therefore in all generations’ interests to prioritise spending on the young.” IF calls on both governments and the European Commission to embark on a programme of “intergenerational rebalancing” by assessing all their policies for their impact on younger and future generations. Policies that aim to achieve intergenerational rebalancing could include stricter adherence to debt-­‐to-­‐GDP limits, investing more in education, raising retirement ages further, copying Germany’s successful apprenticeship model, encouraging greater democratic participation, introducing renewable energy sources more quickly and investing more in research and development. -­‐ends-­‐ Note to Editors: For interview enquiries please contact: [email protected] mob: 07971 228823 You can explore the data with IF’s online visual tool available at http://index2016.if.org.uk An exploration of key news lines for each indicator is set out below. The IF EU Index is a quantitative measurement of how the position of young people has changed across the EU. Each of the 13 indicators used in the IF EU Index was chosen for its ability to reflect how countries treat younger and future generations. They include housing costs, government debt, spending on pensions, spending on education, youth unemployment, income levels, participation in democracy, access to tertiary education, poverty and social exclusion, investment in the future (R&D), environmental impact, usage of health services, and dependency. 1. Long-­‐running open-­‐source data series from Eurostat were used to compile the Index. 2. A rise in the Index score represents an increase in intergenerational unfairness… 3. …except for spending on education, tertiary education and R&D where a rise in the Index score represents a fall in intergenerational unfairness. 4. Permission to reproduce permitted under Creative Commons License. The Intergenerational Foundation (www.if.org.uk) is an independent, non-­‐party-­‐political charitable think tank based in London that researches fairness between the generations. IF calls for policy to be fair to all: the old, the young and those to come.