From pension funds to piggy banks: (Perverse) consequences of the Stability and Growth Pact since the crisis |
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Authors: | Bernard H. Casey |
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Affiliation: | Institute for Employment Research, University of Warwick, , Coventry, United Kingdom |
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Abstract: | As part of their strategy for economic and monetary union, European governments committed themselves to fiscal discipline – particularly by placing limits on annual deficits and on public debt. Subsequently, and as they sought to respond to the “current crisis”, they embraced the view that only if public finances were kept under control would sustainable recovery be possible. Rules of fiscal governance were strengthened. To help them meet these rules, the governments of many member States of the European Union made changes to their pension systems or to funds they had established specifically to pay the costs of population ageing. The intention was not to cut retirement benefits or to improve the efficiency of the relevant pension schemes and institutions. Rather, it was to free up resources immediately. Funded pension schemes and pension funds were treated like “piggy banks” that were raided when times became hard. Moreover, the policies pursued succeeded in meeting their objectives only because the system of national accounts according to which outcomes are judged does not recognize the way in which most of the fiscal gains are matched by future fiscal liabilities. |
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Keywords: | pension fund provident fund governance economic crisis State European Union Mots clé s: fonds de pensions fonds de pré voyance gouvernance crise é conomique Etat Union europé enne Palabras clave: fondo de jubilaciones fondo de previsió n gobernanza crisis econó mica Estado Unió n Europea Schlü sselwö rter: Rentenfonds Vorsorgefonds Governance Konjunkturabschwung Staat Europä ische Union |
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