The European Commission recently released sobering statistics about the European Union's financial future, and singled out the Czech Republic as a country that needs significant age-related policy changes.

"The challenges faced by Cyprus, Slovenia, Hungary and the Czech Republic are among the biggest in the whole of the EU," concluded the report, debated at a meeting Feb. 13 and 14 in Brussels.

The country is expected to see a 23 percent drop in the number of employed people during the next several decades, the biggest decline in the EU. That means there would be fewer people paying into the country's pension system.

The country's elderly population is expected to increase 17 percent during that same time, and the report estimates that spending on pensions, health care and long-term care could increase nearly 42 percent.

And Czechs may tap into the pension system longer in the coming years: By 2050 the country will see a 164 percent increase in people over the age of 90.

"The situation is very serious," Pavel Mertlík, former finance minister and chief economist at Raiffeisenbank, told The Prague Post. "Pension system reform is a must. Unless we have one, our public finances are sure to collapse by 2050."

The Finance Ministry has prepared a long-term analysis of the pension system through 2100, and the country was aware that the system was in trouble even before the recent, gloomy EC numbers, spokesman Jaroslav Růžek said.

In 2004, the Finance Ministry formed a team of experts to analyze possible reforms and presented its findings to the Chamber of Deputies last year.

Five parliamentary parties discussed the topic, but the report has since languished.

"There has been no consensus reached yet on what the reform would be like and how it would be implemented," Růžek said.

Moreover, the Labor and Social Affairs Ministry said that the country has failed to even set the boundaries of the discussion that would begin the process of pension reform.

Finance Minister Bohuslav Sobotka said after the EU meeting that the country cannot escape pension reform and that legislation defining the rules of the reform must pass in the next election term.

Pension reform has become as politicized an issue as any other here.

The tough decisions that pension reform requires serve only to slow the process.

Financial experts and politicians agree that any solution would require an increase in the country's retirement age, a reduction in social security benefits or some combination of the two.

But 95 percent of Czechs do not think the retirement age should be increased, according to a Jan. 31 Labor and Social Affairs Research Institute study.

And social-security benefits actually increased in 2005 — a move that experts attribute to the proximity of the general elections in June.

The election platform of the ruling Social Democrats (ČSSD) promises multiple social-security benefit increases and an overhaul of the pension, healthcare and social systems in the next election term.

Růžek said the effects of increased pension spending would not be felt for 10 years, and the problem will spread to other areas if reform does not take place before then.