{"id":165843,"date":"2025-09-24T10:05:10","date_gmt":"2025-09-24T10:05:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/165843\/"},"modified":"2025-09-24T10:05:10","modified_gmt":"2025-09-24T10:05:10","slug":"italy-weighs-freezing-its-retirement-age-at-67","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/165843\/","title":{"rendered":"Italy weighs freezing its retirement age at 67"},"content":{"rendered":"

Unlock the Editor\u2019s Digest for free<\/p>\n

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/p>\n

Prime Minister Giorgia Meloni\u2019s government is considering a freeze in Italy\u2019s retirement age of 67, in a move critics warn would put renewed pressure on the country\u2019s improving but still fragile public finances.<\/p>\n

Italy\u2019s existing pension law links the statutory retirement age to life expectancy improvements, mandating a review every two years \u2014 and automatic upward revisions if warranted.<\/p>\n

But Italian labour unions are demanding a halt to the automatic increases, and an overhaul of the pension<\/a> law, which was adopted during the Eurozone sovereign debt crisis when Rome sought to restore market confidence.<\/p>\n

Their demand comes as the French and German governments are encouraging their own citizens to work longer amid concerns about the viability of pension systems as their populations age<\/a>. While Italy\u2019s statutory retirement age is higher than others, its population decline is one of Europe\u2019s fastest.<\/p>\n

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The far-right League party, which is part of Meloni\u2019s ruling coalition, has long criticised the pension law\u2019s provision for automatic increases, and is backing a freeze.<\/p>\n

\u201cIf you have the retirement age at 67, it\u2019s a huge problem,\u201d said League senator Claudio Durigon, a former factory worker and union leader, now the under-secretary of labour.\u00a0<\/p>\n

Durigon said that some older workers had died while operating heavy machinery, and that linking the retirement age to life expectancy was \u201ca beastly policy towards the working man\u201d.<\/p>\n

The pensionable age last rose in 2019, before the Covid-19 pandemic \u2014 when it jumped five months to 67 years. From January 1 2027, it is due to rise by three months.<\/p>\n

Finance minister Giancarlo Giorgetti said earlier this year that he was amenable to a two-year freeze, which would pause the automatic adjustment to the retirement age until 2029. The finance ministry told the Financial Times the idea was still \u201cunder discussion\u201d and any decision would take into account \u201cthe overall economic picture\u201d.<\/p>\n

Italy\u2019s independent parliamentary budget office estimated that if the retirement age was frozen \u2014 and the automatic adjustment mechanism deactivated, pension costs would rise by 0.4 per cent of GDP between now and 2040.<\/p>\n

It also said Italy\u2019s debt-to-GDP ratio would rise to 139 per cent by 2031, seven percentage points higher than current forecasts for that date.<\/p>\n

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Economists say any such step would send a dangerous signal to investors who are already jittery about French debt, given strong opposition<\/a> in that country to reform of its own retirement age. <\/p>\n

\u201cItaly\u2019s pension reform \u2014 the automatic linkage between the statutory retirement age and life expectancy \u2014 is the anchor of its [Italy\u2019s] fiscal sustainability,\u201d said Filippo Taddei, senior European economist at\u00a0Goldman Sachs.\u00a0<\/p>\n

\u201cIf people live longer, the retirement age moves up and that keeps the fiscal system automatically in balance,\u201d Taddei said. \u201cIt gets around a very tight political constraint since changing the retirement age is a super toxic political problem across Europe.\u201d<\/p>\n

Meloni\u2019s government has gained recognition from investors for its fiscal discipline since taking office in late 2022, helping to push the spread between Italian and German 10-year bond yields below 0.8 percentage points last month for the first time since before the Eurozone debt crisis.<\/p>\n

At about 3.6 per cent, Italy\u2019s borrowing costs are trading broadly in line with France\u2019s \u2014 a reversal for an economy previously viewed as a byword for fiscal profligacy. <\/p>\n

Rating agency Fitch upgraded Italy\u2019s sovereign debt rating by a notch to triple B plus last week, citing \u201cincreased confidence in Italy\u2019s fiscal trajectory underpinned by a growing record of fiscal prudence\u201d.<\/p>\n

But Tito Boeri, former president of Italy\u2019s National Institute of Social Security \u2014 which runs the pension system \u2014 warned that severing the link between pension age and life expectancy would weigh heavily on Italy\u2019s debt trajectory.<\/p>\n

\u201cThis mechanism is very precious and should not be altered\u2009.\u2009.\u2009.\u2009[otherwise] the consequences for Italian public debt are going to be quite dramatic,\u201d said Boeri, now an economics professor at Bocconi University.<\/p>\n

Elsa Maria Fornero, the primary architect of the pension reform, said it could be politically \u201cdifficult\u201d for Rome to raise the retirement age again.<\/p>\n

\u201cFrom both a political and financial point of view, I would suggest prudence,\u201d said Fornero, who now teaches at the University of Turin.<\/p>\n

Despite the relatively high retirement age, just 46 per cent of Italians aged between 50 and 74 actually work \u2014 one of the lowest levels in Europe, due to past low retirement ages and early retirement schemes.<\/p>\n

With Italy\u2019s next national elections looming in 2027, analysts are concerned that Meloni\u2019s government may be tempted to adopt populist measures it previously avoided.<\/p>\n

\u201cI fear that getting closer to the election date,\u201d Boeri said, \u201cthey will give up the only good thing that was done in all these years, which was to be prudent, and not do silly things.\u201d\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this…\n","protected":false},"author":2,"featured_media":165844,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[45,49,48,133,131,132],"class_list":{"0":"post-165843","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-finance","12":"tag-personal-finance","13":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/165843","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=165843"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/165843\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/165844"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=165843"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=165843"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=165843"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}