by Martin Banks
According to its author, Giles Merritt, ageing is beginning to “destroy social structures and threaten our political stability.” It also, says Merritt, raises “uncomfortable questions” about social justice and the “looming bankruptcy of pension funds” in the years ahead.
In Timebomb: When Ageing Explodes, Merritt sounds an important warning that, unless Europe defuses “ageing’s explosive force”, within two decades its societies will be “devastated by it.” He asserts that millennials and Gen-Z’ers are condemned to pay much higher taxes to fund pensions and healthcare for older people, but will receive far less when they retire. He also believes the longstanding ratio of four taxpayers supporting each pensioner has shrunk to less than 3:1, and by mid-century will be an “unsustainable” 1.7:1.
There will, the book states, be 60 million more pensioners in Europe by 2050 which means older people can easily outvote younger taxpayers. Europe’s under-35s own less than 5% of all net wealth, whereas ’Baby Boomers’ at the same age had 20%, and up to two-thirds of ’Generation Rent’s income can be swallowed by housing costs. Europeans’ healthcare costs will have doubled by mid-century, averagely taking up more than a quarter of governments’ budgets, says the book. Merritt says, “Europeans haven’t embraced new technologies as effectively as Asians and Americans, and have shown a navel-gazing preoccupation with intra-European questions.”
They have “neglected” the reforms needed to streamline Europe’s industrial base and to confront the consequences of ageing, he argues. “These have been confusing years for Europe. In 1980 it accounted for almost a third of the global economy, but now just 15 per cent. On the other hand, Europe was mostly a geographical description then; the EU numbered nine countries, whereas today it has three times as many, its own currency and an embryo political structure. The bloc is potentially a super-power,” he states.
Ageing, he believes, is a “largely invisible problem.” “To use a nautical metaphor,” he adds, “Europe’s ship of state may appear to be sailing serenely onwards, but it is holed below the waterline by its demography.” Britain is no less vulnerable for having left the EU, and “perhaps more so,” says Merritt.
This book presents a Europe-wide picture of the problems that ageing is creating, and also draws substantially on developments and research in the UK. Its overall message is that ageing is hitting almost all developed nations to a greater or lesser degree, and risks undoing much that the EU’s economic and political integration has achieved. Merritt sounds a note of optimism, saying, “It’s not too late to address these problems because although we can’t divert the demographic tsunami rolling towards us, we can surf it rather than sink and drown.” He adds, “Ageing’s impact could be softened by an array of policy measures that would adapt our 20th-century structures to the exigencies of the 21st.”
“The snag is that doing so would impose an immediately heavier tax burden to alleviate the crushing costs awaiting the taxpayers of tomorrow. The other option of borrowing to add to European countries’ teetering debt mountains would cynically aggravate the financial troubles we are imposing on today’s youth. “When asked about the future, most young people see climate change as their toxic legacy.
There’s no disputing that mankind is failing to tackle global warming with the necessary speed and determination, but that doesn’t lessen ageing’s threats. Both are massively disruptive forces. “My modest hope is that this book will help to draw more attention to ageing’s consequences and will stimulate efforts to counter them.”
*Timebomb: When Ageing Explodes, is available at all good bookstores.
**Merritt has been based in Brussels since 1978 and writes a fortnightly ‘Frankly Speaking’ commentary for ‘Friends of Europe’.
By: N. Peter Kramer
