European Union countries could face a massive budgetary and welfare crisis within 50 years unless they tackle the problems of an ageing population, the continent's banks warned on Thursday.
The European Banking Federation said in a study that people's working lives needed to be extended and pension systems to be reformed if the EU is not to fall further behind the United States in terms of growth and competitiveness.
Politicians should also face up to the need for more immigration, the chairman of its economic and monetary affairs committee, Martin Huefner, told a news conference.
"If current policies remain unchanged, EU member states would run into an unprecedented budgetary and welfare crisis by the middle of this century," Huefner said.
"It makes the efforts to promote growth in Europe, especially the Lisbon process, even more urgent," he added, referring to the EU's goal of transforming its economy into the world's most dynamic by 2010.
The banking federation report said the US population would keep growing steadily until 2050 while the EU population would start to decline after 2020.
This meant that by 2050, there would be two people of working age for each person aged over 65 in the EU, compared with a ratio of four to one at the moment.
The federation urged EU politicians to reform pension systems to encourage private pension provisions and extend working life.
It also stressed the need to look again at immigration policies, but admitted this was a thorny political issue.
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