The American daily New York Times (NYT) reported on the 14th (local time) that the background to the spread of cost-of-living protests across Europe is a 'conflict between generations' due to a lack of money to spend on other public sectors due to rising pension costs in an aging age.
In various parts of Europe, including France, Belgium, Germany, Greece, Italy, Spain, and Portugal, young people are taking to the streets to protest against housing difficulties, high prices, and deterioration of public services such as schools.
In the background, there is a fundamental problem of insufficient government finances, and the largest sector in most European countries' budgets is the welfare budget, such as pensions for the elderly.
Sebastien Ducro, a 36-year-old data analyst who supports French student protests, pointed to old-age pensions as the reason the government doesn't have enough money to spend on schools. “A huge amount of money is going to retirees,” he said. “Honestly, I don’t think people like my parents should and can give up some of their pensions.”
Alejandro Lojano (28), a bank employee who lives in the basement of an apartment in Madrid, Spain, lamented that his grandparents, who are in their 90s, are receiving a pension higher than his own salary.
But Laurent Granwald, 72, who recently retired after working for the postal service for decades, said, "We've worked our whole lives," and added, "But now we're suddenly saying, 'I need to take a little more (from my pension).'" He also pointed out that housing costs and other living costs have all risen.
As much of Europe is experiencing an aging population, the cost of public services and subsidies for the younger tax-paying workforce is flowing to pensions for older people. In addition, due to pressure from the United States on Europe's own defense and security threats from Russia, European countries are increasing their defense spending, and the budgets of each country's governments are becoming tighter. As public debt piles up in major countries and interest rates rise, debt management costs are increasing.
According to data from Eurostat, the European Union's statistical agency, last November, EU social security payment spending in 2024 increased by 6.9% from the previous year, reaching 27.3% of the entire EU's gross domestic product (GDP). In France, where protests are severe, this ratio is 31.9%, second only to Finland (32.5%).
The largest share of EU social security spending is old-age pensions, accounting for 41.5%.
Over the past decade, many countries have attempted to reform their pension systems by delaying pension payments or lowering costs. Denmark plans to raise the pension age to 70 by 2040.
However, in many countries, such attempts have faced political backlash, with the French government under Emmanuel Macron attempting to raise the retirement age from 62 to 64 in 2023, but stopping it in the face of massive protests. This is because, as people get older, more Europeans view pensions as a sacrosanct foundation of the European welfare system.
In the case of Spain, welfare costs have been covered by increasing the working population by accepting more immigrants since 2018, but this also has the problem that immigrants are also getting older. According to the Organization for Economic Cooperation and Development (OECD), Spain is expected to spend 17.3% of GDP on pensions in 2050. This is 4% points higher than the current level.
Of course, this generational conflict also has a political background. Although the youth population is decreasing, the middle-aged and elderly population, who have the right to vote and can exercise political influence by joining unions or political parties, is increasing.
Lojano, a banker in Madrid, said it was unlikely any political party would want to cut the benefits of a powerful constituency such as retired people.
Jorge Galindo, director of the Essade Institute for Economic Policy, a Spanish think tank, called it a "conflict between generations" and said that, as political interests in protecting the elderly are deep, young people will need to form a voter group that will voice their own political voices. This is because in Europe, minority party seats are often important for forming a coalition government.
There is also a view among some young and middle-aged people that they should protect the senior pension they will receive in the future now.
Daniel Ramo, 46, who recently joined the teachers' strike in Madrid, said he expected to receive a pension after retirement and that his parents' pension had helped him during difficult times.
Encarna Matilla, 72, a retiree from Madrid, said she is using the pension her husband, 88, who worked from the age of 14 to 70, to support his great-grandchildren, adding, "We are (the family's) safety net." The pension they receive of 2,700 euros (about 4 million won) is 60% higher than the median monthly income in Spain.
