It’s not just Greece and Portugal. Across Europe, countries are grappling with the realisation that generous pensions and other social benefits are increasingly unsustainable.
The New York Times surveys the landscape from Athens to Sweden to Paris and finds a host of worriers, folks concerned that their pension systems will go bankrupt, and that those who haven’t saved for themselves will have nothing.
While the actual reckoning may not take place for some time in many of these places (though some sooner than other), the economic effects will start soon if it means consumers are more fearful and start saving more (not necessarily a bad thing).
This is thought to be a major issue in China, where the lack of a good public benefits/retirement system encourages people to horde cash and not spend.
It’s important to wonder how quickly the austerity mindset could sweep Europe, and kick the legs out of a return to economic health in the near-term.