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Ignoring the explicit and implicit pension liabilities when assessing the solvency of the EU-27 countries gives a distorted view of their relative situations. After a short analysis of the main demographic, economic, and political determinants that could influence pension projections, we perform an estimation exercise analogous to that of Mink (2008). Using several fixed discount rate hypotheses, we compute the net present value of forecasted public pension liabilities for the 27 countries, and compare the relative situation of countries under current arrangements. We then propose a heuristic categorisation of the main risks borne by each country?s pensions from their underlying projections. On the basis of this analysis, we recommend that investors be more aware of the risks borne by pension schemes when evaluating the solvency of sovereign debtors. European institutions must keep working towards greater transparency and information regardingpublic finances, and ultimately consider taking into account explicit and implicit pension commitments in the stability targets. This would allow stakeholders to better apprehend pension risk and to foster coordinated long-run reforms across countries.JEL Classification: E62, E63, H55Keywords: public pensions liabilities, sovereign debt, fiscal policy.

Auteurs :Cocquemas François
Extrait de la revue BMI 124