Reconfiguring the Employment-Pension Connection in Times of Austerity

Abstract

The EU's response to the current economic crisis has been a new, stronger emphasis on economic governance and the spread of austerity policies in many Member States. Both sets of measures have impacted on pension systems, which have undergone various reforms to reduce public expenditure. The EU has played an influential role in this field, insisting, despite a lack of competence, on the promotion of complementary private retirement savings to ensure adequate incomes. Consequently, the protection levels of public social security systems are being eroded. This paper discusses these pension reforms in times of austerity by taking the Spanish case as an example. As an alternative to austerity, social policies should focus on increasing budget revenues instead of reducing public spending and should consider changes in employment when reforming pension regulations. A rights-based approach that effectively guarantees an adequate public pension is needed in the light of international regulations and some notable case law.