ITALY - New research has called upon the Italian government to speed up its pensions reforms and curtail its high pension expenditure to free-up resources for other areas.
In its latest economic survey, the Organisation for Economic Co-operation and Development (OECD) says that Italy must reform its labour market and expensive state system, as well as consider introducing a mandatory, fully-funded second tier pension. Currently, the second tier - introduced in 1993 - is also the smallest and consists mainly of private pensions.
According to the survey - which says the Italian budget makes inefficient use of resources due to weak control - latest projections show that Italian spending on pensions may rise by less than 2% of GDP up to 2040 - significantly less than the EU average.
The report recommends further reform initiatives, to extend to all workers, and to phase out so-called ‘seniority’ pensions before 2008.
More could also be done to disincentivise early retirement, added the report.
The OECD is set to release its next economic survey on The Netherlands today.
By Madhu Kalia
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