German and Italian Pensions: Similar Roots, Different Reform Paths, Comparable Trajectories?

Abstract

The article employs a multi-level analytical framework to analyse pension reforms in Germany and Italy between 2011 and 2018, thereby focusing on the role played by the European Union. Whereas the EU is able to react to crises and prevent major deviations from its priorities, its influence has been uneven in the face of policy reversals and its capacity to spur the convergence of the two political economies has been limited. On one hand, the Commission’s recommendations to rebalance pension spending have not been fully followed in either country. On the other, pension-related interventions can only do so much to reduce labour market frictions (a problem particularly felt in Italy). Theoretically, the article innovates the literature on pensions in three respects. First, the study employs a three-level game, where not only the EU and policymakers interact, but also financial markets have an influence. Second, the article provides evidence of the persistent political nature of EU pension policymaking. Consequently, both EU and domestic policymakers have margins to interpret the rules. Third, the piece shows that the EU has little direct influence on reform outcomes. Contingent factors, such as the economic cycle, play a role in shaping the economic indicators of pensions.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

Notes

1 The EU’s role in pension policymaking expanded also through the establishment of the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) in 2003, later replaced by the European Insurance and Occupational Pensions Authority (EIOPA). Being this article chiefly about public pensions it will not directly deal with these two financial regulatory institutions.

2 We define as populist the movements focussing their political strategy on the concept of the people. The latter is identified in socio-economic and/or ethnic terms and counterposed to the political élite (Caiani 2019).

3 It needs to be stressed that the low average educational level of the Italian labour force plays a major role in reducing activity rates among older workers.

4 A criticism against referring to budget deficits may be that the Italian primary balance is in surplus. Yet, as the literature demonstrates (see Mosley 2004), it is the overall deficit as per the Maastricht criterion that commands the greatest attention, precisely because it represents a political threshold.

Additional information

Notes on contributors

Igor Guardiancich

Igor Guardiancich is an Assistant Professor at the Department of Political Science, Law, and International Studies (SPGI) of the University of Padua. Guardiancich’s research is focused on political economy, public and social policy, European integration, transition in Central and Eastern Europe, social dialogue and industrial relations. His work includes the monograph Pension Reforms in Central, Eastern and Southeastern Europe: From Post-Socialist Transition to the Global Financial Crisis published by Routledge in 2013, and the volume co-edited together with Oscar Molina in 2017 for the ILO, entitled Talking through the Crisis: Social Dialogue and Industrial Relations Trends in Selected EU Countries. In addition to these, he has published in highly ranked international peer-reviewed journals, such as European Union Politics, Governance, Journal of Common Market Studies, Regulation & Governance, Socio-Economic Review, West European Politics and several others.

David Natali

David Natali is Full Professor of Comparative Politics and of the European Union at the Scuola Superiore Sant’Anna in Pisa as well as Associate Researcher at the European Social Observatory (OSE) in Brussels. Between 2018 and 2020, he has directed the joint doctorate in Transnational Governance of the Scuola Superiore Sant'Anna and the Scuola Normale Superiore of Pisa. He has been involved in numerous European research projects on the issues of welfare state reform, especially pension policies, in Italy and major European member states. Much of his research focuses on the role of the European Union in the reform of social and labour policies and on the action of the social partners in the same fields. Among others, he recently edited the book The New Pension Mix in Europe (PIE Peter Lang, 2017) and, before that, co-edited together with Giuliano Bonoli The Politics of the New Welfare State (Oxford University Press, 2012).