The open method of co-ordination: Some remarks regarding old-age security within an enlarged European Union

19

curtail spending in this area, in order to maintain the sustainability of public finances.⁷² In this
context it has to be clarified that the report does not consider whether an indicator is able to meas-
ure the capacity of systems to meet their social objectives or, to meet changing societal needs -
even though these issues were identified as key stakes in old-age security reforms during the
Gothenburg and the Stockholm Council.⁷³

A rather socially orientated and comprehensive approach was outlined in the Commission’ discus-
sion-paper Social indicators for monitoring pension reforms.⁷⁴ The purpose of this paper was to
set off an orientation debate on the most appropriate indicators in the area of pension reforms. In
this paper the Commission pointed out that indicators on pension reforms should allow for the
large diversity of national old-age security systems. At the same time they are supposed to be ca-
pable of providing comparable quantitative information on the major economic, financial and
demographic trends affecting the long-term sustainability of old-age security, as well as informa-
tion on the progress of pension reform and its likely impact. For this purpose a large variety of
indicators will be needed: performance indicators (drawn from statistical data) as well as political
indicators (mostly drawn from administrative or institutional information); retrospective indica-
tors as well as projections. The paper clarifies a possible identical thematic structure for a com-
prehensive social indicator approach, namely indicators for measuring financial sustainability,
social cohesion and adaptability to change. This structure is the basis for the set of possible indi-
cators presented in this paper. The document gives an overview about the ‘justification’, the ‘in-
terpretation’ and the ‘source’ of most of the indicators.⁷⁵

Concerning the social indicators to monitor old-age security reforms, one remark to these different
approaches of the actors has to be made. Obviously, it is very difficult to agree on a common ap-
proach due to different priorities of the actors. As clarified in the joint report on Objectives and
working methods in the area of pensions: applying the open method of co-ordination, differences
lead to a compromise that neither satisfies the economically orientated nor the socially orientated
actors. In view of the different approaches of these actors, an accord on social indicators and
benchmarks is not to be expected soon. First it has to be discussed how the old-age security sys-
tems can be compared, and how the social components of the systems can be presented suffi-
ciently. From a normative point of view it is very important that not those member states who
burden their national budgets least assessed top but those which, at the same time, maintain the
highest possible level of protection.⁷⁶ For the society of EU member states as well as of candidate
countries, this nexus is extremely crucial.

Cf. Economic Policy Committee (2001: 23 ff.)

Though, the EPC points out that it will take the initiative to work out indicators that would not only tell
about the sustainability of public finances, but also the quality of the old-age security systems. Cf.
Economic Policy Committee (2001: 32).

The paper was issued by the DG Employment and Social Affairs’ (DG ESA) of the European Commission.

Cf. European Commission (2001) as well as the comments in Gobel (2002: 141 ff.) and Schulte
(2002: 21 ff.).

For this criticism see Schmahl (2002: 117 ff.) and Sommer (2002: 4 f.) as well.

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