Nobel laureates warn European welfare systems face sustainability crisis

Four Nobel laureates in Economics—David Card, Joel Mokyr, James A. Robinson, and Alvin Roth—have issued a warning regarding the sustainability of the European welfare state. Speaking at the International Economics Festival in Turin, the economists highlighted that the current model is under intense pressure from three primary factors: aging populations, rising defense expenditures, and the massive investments required for the climate transition.

Joel Mokyr noted that these demographic and economic tensions threaten the very foundation of social protections. David Card emphasized that welfare is a complex system including education, healthcare, and pensions, which relies heavily on public perception; he warned that the system only functions if citizens perceive it as a success, a sentiment currently under threat.

To preserve social achievements, James A. Robinson suggested that a new social contract with citizens is necessary, arguing that simply stating "we cannot pay" is insufficient. Alvin Roth added that political and economic stability are linked, noting that markets require social consensus to function effectively.