Salvini and the broad coalition united in their anti-Fornero agenda. Young people foot the bill

Some promises never retire. On Sunday, Deputy Prime Minister Matteo Salvini, speaking at the Lega congress that re-elected him as secretary, once again called for the ‘Fornero law to be scrapped’. ‘Allowing people to retire at 64’, he said, is one of the Lega’s priorities for the Budget Bill. Repealing the Fornero law no longer seemed to be one of his objectives; instead, it had been called for by the broader opposition, which was already opposed to adjusting the retirement age in line with life expectancy, but is now also opposed to updating the conversion coefficients for the accumulated contributions. In a political debate held hostage by the demographics of the electorate, Salvini has thus returned to championing the anti-Fornero agenda.

To understand what is at stake for Italy, one needs to read the latest report by the State General Accounting Office (RGS) on ‘medium- to long-term trends in the pension system’, published in July. Pension expenditure currently accounts for around 15.2 per cent of GDP: to put this into perspective, this is almost a third of public sector expenditure, which is projected to reach 51.1 per cent of GDP in 2025. However, it is set to rise gradually, peaking at 17.1 per cent of GDP in 2041, because the ‘baby boom’ cohorts will be leaving the labour force and because the denominator (GDP) will not increase proportionally. Expenditure is then forecast to fall to 16.2 per cent of GDP in 2050 and to 14 per cent in 2070, as a result of the widespread application of the contribution-based pension system and ‘the stabilisation and subsequent reversal of the trend in the ratio between the number of pensioners and the number of people in employment’.

This decline, however, depends on a number of assumptions. The first is that the retirement age will continue to follow the trend in life expectancy, which, according to the RGS scenario, will rise to 85.8 years for men and 89.2 for women by 2070. It is also necessary that, by 2070, the fertility rate rises from 1.18 in 2024 to 1.44 and that the employment rate rises to 66.7 per cent, 4.2 percentage points higher than the 62.5 per cent recorded in 2025. A substantial net migration balance is also required, amounting to around 260,000 people per year in the two-year period 2026–2027 and then stabilising at 165,000 in the long term.

Failing to adhere to the assumptions would already be risky; altering them structurally risks becoming a financial disaster. The RGS calculates that permanently eliminating even just the automatic adjustment of pension entitlements to life expectancy would cause public debt to rise by around 17 percentage points of GDP by 2045 and by 38 by 2070. Last year, the government merely reduced the increase planned for 2027 from three months to just one, postponing the other two to 2028, and that alone cost 1.6 billion (according to the Catholic University’s Observatory on Public Accounts, halting the adjustment entirely would have cost 3.3 billion in the first year and 4.7 billion in the following year).

According to government estimates cited by ANSA in September, the extension to the age of 64 proposed by Salvini – and, before him, by Undersecretary Claudio Durigon – would affect 180,000 workers over the three-year period and cost around 5 billion euros. Should the government give in to these demands, coalition partners would likely object, given that these funds would compete with those earmarked for the IRPEF tax cut from 43 per cent to 33 per cent on incomes between 50,000 and 60,000 euros – a measure costing around 3 billion – which Forza Italia and Antonio Tajani have been insistently calling for over the past two years, but for which there are insufficient funds in the Budget Policy Document. And this is just one of the requests for the budget bill still awaiting funding. According to a survey published yesterday by Il Sole 24 Ore, the substitute tax schemes that the government is seeking to reform already cost a total of 13.1 billion euros a year.

What they are seeking to dismantle in Italy is precisely what France needs, where the minimum retirement age is 62 years and 9 months for those born in 1964 and will rise to 64 for those born from 1969 onwards. In its annual report published in June, the Conseil d’orientation des retraites (COR) projects a deficit of 2.4 per cent of GDP in 2070 under the current legislative framework, which incorporates the partial suspension of the Macron reform. Of the measures examined by the COR, only postponing retirement improves the health of the accounts whilst also supporting economic activity. In short, in France they are studying the rationale behind a ‘Fornero’-style reform, which in Italy they are seeking to dismantle. The bill, after all, is always passed on to future generations.