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Analysis. The economic development organization is raising alarm about Italy’s ‘pension spending,’ but it fails to mention that includes other forms of assistance. Italy has one of the highest retirement ages in Europe.

OECD report misrepresents Italian pension figures

The Organization for Economic Co-operation and Development (OECD) has launched a new attack against the Italian pensions system. According to the “Pension at a Glance 2017″ report published Tuesday, Italy is spending 16.3 percent of its GDP on pensions (the data dates from 2013), second only to Greece (17.4 percent) and double the OECD average (8.2 percent). Since 2000, they say, this expense even increased by 21 percent. Spending on pensions, according to the report, takes up a third of the public expenditures: 32 percent, compared to the average of 18 percent in OECD countries.

All these data are fake news. It was clarified a long time ago — but not enough, apparently, for the OECD’s “experts” — that in Italy, “pension spending” is counted as including all forms of public assistance.

This anomaly was pointed out by the unions, as well as by the president of the INPS (National Institute of Pensions), Tito Boeri, according to whom the institution should be called “della Protezione sociale” (“of welfare”) and not “della Previdenza” (“of pensions“), since, out of the 440 forms of assistance they provide, only 150 are of the nature of a pension.

Felice Roberto Pizzuti wrote recently in il manifesto that, excluding severance indemnities (deferred wages and unemployment benefits, not pensions), and taking into account the level of taxation (on average higher in Italy), the net expenditure on pensions is at 11 percent of GDP, in line with that of France and Germany. What’s more, according to Alberto Brambilla, a former undersecretary of the Berlusconi government, the accounts are showing a surplus. The revenues are €172.2 billion, and the expenses are €168.5 billion, which would leave assets of €3.7 billion, without counting public assistance.

We can ask ourselves what the reasons are for this systematic misinformation, but it must be said that it is not new. For Ambrogioni Giorgio, president of CIDA, the OECD’s alarmism can be explained by the political will to create a generational conflict between the young and the old, leading people to believe that the pensions of the latter are to blame for the insecurity of the former.

There is also another reason. After having robbed public servants with the freezing of salaries and of turnover, and having hit the private sector hard with a cut in wages, now among the lowest in Europe, it is the pensions’ turn to be used as an ATM for extraordinary withdrawals and blocks to automatic equalization. Finally, the intention of the unions to block the automatic rise in retirement age established by the Fornero “reform” must have also played a part. The European Commission had already warned the government to not give in to such a request, although in the end a modest and reasonable one.

The warning became a threat last week, when the lie was spread that the State was spending 88 billion Euros more than it was collecting from contributions, or 5.2 percent of GDP. This fake news was featured in a “report on aging” from the E.U. Commission.

The real problems must still be dealt with, created by the Dini reform in 1995. Italy is one of the few countries to have tied the retirement age to life expectancy. For this reason, young people born in 1996 who are now 20 years old will work until they are 71 years and 2 months old. It is the highest retirement age estimate of all the OECD countries, after Denmark (74 years). But these figures are only indicative. Given the decline in births (100.000 less in ten years) and the increase in the average age (in 2050, those over 65 will be 72 percent of the population, compared to an OECD average of 53 percent), it is possible that the bar will be set even higher, up to the 75 years envisaged by Tito Boeri — or even 80, why not.

Behind the implausible figures invoked in support of them, the meaning of all the pension reforms, as well as the labor market reforms, from the “Treu package” in 1997 to the Jobs Act in 2015, which led us to this situation, is this: In a post-Fordist economy, where “permanent” jobs are going to be replaced by “insecure” ones, you will work more and more, all your life, with ridiculously low wages and pitiful pensions — if those in their 20s even manage to survive until then, going from one “small job” to the next. A prospect that people did not expect, and about which no one, including the OECD, is able to give an explanation that doesn’t simply come down to considering this inhuman prospect, of an indebted and poor life for all, inevitable.

Underneath all the talk about pensions today, this social time bomb is ticking. And there are still only few who are speaking out about it. The confederal secretary of the CGIL union, Maurizio Landini, did so Tuesday, saying that “we must redo the wrongheaded pension reform that leaves no future for young people. A purely contributory system does not exist anywhere in the world except in Chile. And it looks to me like a big mess.”

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