## Are Europe's Social Security Finances Compatible with EMU?

_IMF Policy Discussion Papers, March 1, 1997_

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## Bibliographic details
- Authors: George Kopits
- Published: March 1, 1997
- Series: IMF Policy Discussion Papers
- DOI: https://doi.org/10.5089/9781451974034.003

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### Summary
- Author: George Kopits
- Publication date: March 1, 1997
- Series: Policy Discussion Paper No. 1997/003
- Main thesis: In several EU members, the financial imbalance of social security institutions may constitute an impediment to meeting EMU deficit and debt convergence requirements established by the Treaty of Maastricht. Given a constraint on further payroll tax increases, most countries will need to undertake major reform of public pension and health-care systems to ensure adherence to the EMU fiscal criteria in the medium to long run.

### Key findings
- The Treaty of Maastricht requires convergence toward specified limits on the overall deficit and gross debt of general government.
- Financial imbalances in social security institutions in several EU members may impede meeting these EMU fiscal requirements.
- There is a constraint on further payroll tax increases in many countries.
- Most countries will need major reform of public pension and health-care systems to meet EMU fiscal criteria in the medium to long run.

### Policy implications and recommendations
- Undertake major reform of public pension systems.
- Undertake major reform of public health-care systems.
- Recognize that relying on further payroll tax increases is constrained and therefore not a broadly feasible solution.

### Subjects and keywords (as listed)
- Subjects: Expenditure, Financial institutions, Health, Health care, Labor, Pension spending, Pensions, Securities, Unemployment benefits
- Keywords: benefit, EU accession, EU member, Europe, Germany, Health care, health-care benefit, PDP, Pension spending, Pensions, Securities, sick pay, social security institution, Unemployment benefits

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- **Are Europe's Social Security Finances Compatible with EMU? - PPAA/97/3**
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_Source: https://www.imf.org/en/publications/imf-policy-discussion-papers/issues/2016/12/30/are-europe-s-social-security-finances-compatible-with-emu-2119_