Globalization's challenge to pension reform in Western Europe

The following suggests that demographic changes and the creation of a single currency in Europe has compelled greater EU intervention in pension reform. Although, traditionally pension reform has remained the domain of the domestic realm, increased European integration has necessitated lifting the issue of pension reform to the EU level.Capital flows among Eu member states, the economic dependence among members of EMU and the unique institutional structure of the EU has facilitated increased attention at the EU level regarding pension reform. Politically, the EU presents a unique condition since national governments can use Brussels as a scapegoat to implement contested policies such as pension reform and accountability at the EU level is distinct from democratic configurations within member states also facilitating change within a highly contested policy area. Economically, the almost complete economic integration after the introduction of the Euro, means that countries are ever more dependent on policy choices in other Member States: no lOnger are countries able to keep all the benefits of prefunding, like increased investment, within their own borders. This study concludes that both the political and economic importance of the EU and its uniqueness may lead to an important role of Brussels in the context of pension reform.