Download Italy: The Second Worst Country in the EU for the Young Today

 PRESS RELEASE Embargoed: 00:01 11 March 2016 Italy: The Second Worst Country in the EU for the Young Today Old-­‐age dependency, pension spending, government debt and youth unemployment make Italy the second worst country for the young today, according to the first Europe-­‐wide Index of Intergenerational Fairness launched by the UK-­‐based think tank the Intergenerational Foundation (www.if.org.uk). Italy has performed significantly worse than many of its European counterparts, in a set of 13 social and economic indicators. The only country with worse figures is Greece. Unsurprisingly, government debt is the key driver of Italy’s malaise. Government debt outstrips any other indicator due in large part to the continuing fallout from the 2008 recession. In 2014 Italian government debt as a proportion of Gross Domestic Product (GDP) reached 132%. Under the Stability and Growth Pact, EU states should not have government debts of more than 60% of GDP, but Italy is one of 16 member states currently breaching this target. Added to these woes is that fact that Italy also has the fourth highest expenditure on pensions as a percentage of GDP, at 11.2% in 2012; and the worst old-­‐age dependency ratio in the EU in 2014, at 33%. This means that Italy has only three people of working age to support every person aged 65 and over, following a 12% deterioration between 1990 and 2014. With sky-­‐high youth unemployment of more than 42% in 2014, Italy’s youth unemployment is almost double the EU average. It means that there are fewer economically active young people to support Italy’s rapidly ageing population. The ratio of young Italian people out of work compared to the population average was the third worst, with two-­‐fifths of those aged under 25 out of work. Angus Hanton, IF Co-­‐Founder, comments, “A key concern to the Italian government should be the emerging intergenerational crisis that IF has identified. Very high levels of government debt, the highest old-­‐age dependency ratio in Europe and spending on pensions cannot be paid for if younger workers are economically inactive. Furthermore, the country’s inability to invest in future competitiveness (education, training and R&D) means that many young people in Italy 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.” 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 was chosen for its ability to reflect how countries treat younger and future generations. .../2 2/… 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. When rated against each indicator, Italy comes in the bottom six countries for government debt as a proportion of GDP (second worst), pensions as a proportion of GDP (fourth worst), spending on education as a percentage of GDP (sixth worst, with just 0.2% increased spending between 2007 and 2011), health usage by the over-­‐60s (second highest) and the fourth worst country for youth unemployment in 2014. There is some good news. Italy was beaten only by Belgium – where voting is compulsory – in terms of young people voting in national elections. Italy also scores well for its efforts to tackle Green House Gas (GHG) emissions, reducing its emissions by 15% between 1990 and 2012. However, this is still a long way behind Lithuania, Latvia and Romania, all of which have reduced their emissions by more than 44% over the same period. 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. 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-­‐ For interview enquiries please contact: [email protected] mob: 0044 (0) 7971 228823 Note to Editors: You can explore the data with IF’s online visual tool available at http://index2016.if.org.uk An EU-­‐wide press release is also available. 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…except for spending on education, tertiary education and R&D where a rise in the Index score represents a fall in intergenerational unfairness. 3. 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.