The ageing of the population is becoming a growing challenge to the sustainability of public finances in the EU Member States. The increase of the ratio between the number of retirees and the number of workers will amplify expenditure on public pensions and health and long-term care and thus puts a burden on maintaining a sound balance between future public expenditure and tax revenues.
The EPC's Working Group on Ageing Populations and Sustainability (AWG) is constituted to contribute to improving the quantitative assessment of the long-term sustainability of public finances and economic consequences of ageing populations of the EU Member States, so as to assist policy formation.
The 'Code of Conduct' on the content and format of the Stability and Convergence Programmes (SCPs) stipulates that the common budgetary projections by the EPC’s AWG provide the basis for the assessment by the Council and the Commission of sustainability of the Member States' public finances, within the context of the Stability and Growth Pact.' The work by the AWG should also feed into the work of the Europe 2020 strategy and other relevant co-ordination processes.
The core and priority business of the AWG is to:
Member States, the Commission services and the ECB should be represented by two experts. There should be close co-operation with Eurostat, in particular on population projections, as well as with National Statistical Institutes. Where appropriate, it should also liaise with other relevant institutions (i.e. as IMF, WB, OECD), other Committees (mainly the Social Protection Committee) and their related working groups and research institutions that develop methodologies and prepare projections in this area.