Financialisation of Pensions in Europe: Systemic and Variegated Effects in Semi-Peripheral Portugal

Abstract

This paper aims at contributing to the literature on the financialisation of pensions in Europe by examining the transformations occurring in semi-peripheral Portugal. The Portuguese case accounts for both the differentiated and uneven nature of financialisation in general and of pension provision in particular, going beyond the Anglo-American model of financialisation prevalent in the literature. While the country followed similar processes to those of core EU countries, leading to an increasingly integrated financial sector in the international arena, this integration was mainly led by the banking sector rather than by capital markets and from a subdued position within the Economic and Monetary Union. This has had reflections on the relatively reduced role of private retirement-income products in the country. Nonetheless, the Portuguese pension system was equally subject to reform aiming at reducing its weight in public expenditure. The result was a reduction in coverage and benefit without achieving an equivalent match in supplementary private forms of pension provision, having particularly detrimental impact on those with unstable labour market careers. Under a prolonged period of economic stagnation and crisis, Portuguese pension provision is moving towards a twotiered system combining an increasingly deteriorated public provision for the majority and a residual private provision offered by an outward oriented financial sector.