Thus, purely from the perspective of fiscal sustainability of the States and the magnitude of the problem, structural alteration in the existing pension scheme, appeared necessary. The Group recommended introduction of contributory pension scheme/s for the new employees of the State Governments in lieu of the existing non-contributory defined-benefit pension scheme.
Current account deficits were exacerbated by excessive expectations of future revenues, encouraged by a benign global environment. As the boom continued, a gap in relative prices opened. Between 1998 and 2007, unit labour costs in Greece, Ireland, Portugal and Spain increased by 10% or more. In the same period, unit labour costs actually fell in Germany, and by more than 10%.