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EU's "Exit from History" - a new meaning to the term "Old Europe"
The fact that Europe's population is shrinking and ageing will inevitably also affect the aspirations of some Europeans to create a superpower to rival the United States. A recent report from the French Institute of International Relations predicts that, by the middle of the century, the EU's GDP will be growing at just over 1% a year compared with more than 2% in North America and at least 2.5% in China. The EU, the report gloomily concludes, faces a “slow but inexorable ‘exit from history' ”.
...Fertility rates across Europe are now so low that the continent's population is likely to drop markedly over the next 50 years. The UN, whose past population predictions have been fairly accurate, predicts that the world's population will increase from just over 6 billion in 2000 to 8.9 billion by 2050. During the same period, however, the population of the 27 countries that should be members of the EU by 2007 is predicted to fall by 6%, from 482m to 454m. For countries with particularly low fertility rates, the decline is dramatic. By 2050 the number of Italians may have fallen from 57.5m in 2000 to around 45m; Spain's population may droop from 40m to 37m. Germany, which currently has a population of around 80m, could find itself with just 25m inhabitants by the end of this century, according to recent projections by Deutsche Bank, which adds: “Even assuming (no doubt unrealistically high) annual immigration of 250,000, Germany's population would decline to about 50m by 2100.”
Combine a shrinking population with rising life expectancy, and the economic and political consequences are alarming. In Europe there are currently 35 people of pensionable age for every 100 people of working age. By 2050, on present demographic trends, there will be 75 pensioners for every 100 workers; in Spain and Italy the ratio of pensioners to workers is projected to be one-to-one. Since pensions in Germany, France and Italy are paid out of current tax revenue, the obvious implication is that taxes will have to soar to fund the pretty generous pensions that Europeans have got used to. The cost is already stretching government finances. Deutsche Bank calculates that average earners in Germany are already paying around 29% of their wages into the state pension pot, while the figure in Italy is close to 33%.
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But while the EU has a rich, old and shrinking population, countries on the Mediterranean's other side have poor, young, growing ones. The tide of immigrants, legal and illegal, crossing the sea is an obvious reaction. So shouldn't Europe be more liberal about immigration, to redress its population imbalance? An appealing idea. But the OECD calculates that immigration might have to be between five and ten times its current level just to neutralise the economic effects of ageing populations. Even today's inflow is causing political strains, with anti-immigration politicians like France's Jean-Marie Le Pen, Italy's Umberto Bossi and the Netherlands' late Pim Fortuyn popping up all over Europe.
Combine a shrinking population with rising life expectancy, and the economic and political consequences are alarming. In Europe there are currently 35 people of pensionable age for every 100 people of working age. By 2050, on present demographic trends, there will be 75 pensioners for every 100 workers; in Spain and Italy the ratio of pensioners to workers is projected to be one-to-one. Since pensions in Germany, France and Italy are paid out of current tax revenue, the obvious implication is that taxes will have to soar to fund the pretty generous pensions that Europeans have got used to. The cost is already stretching government finances. Deutsche Bank calculates that average earners in Germany are already paying around 29% of their wages into the state pension pot, while the figure in Italy is close to 33%.
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But while the EU has a rich, old and shrinking population, countries on the Mediterranean's other side have poor, young, growing ones. The tide of immigrants, legal and illegal, crossing the sea is an obvious reaction. So shouldn't Europe be more liberal about immigration, to redress its population imbalance? An appealing idea. But the OECD calculates that immigration might have to be between five and ten times its current level just to neutralise the economic effects of ageing populations. Even today's inflow is causing political strains, with anti-immigration politicians like France's Jean-Marie Le Pen, Italy's Umberto Bossi and the Netherlands' late Pim Fortuyn popping up all over Europe.
Fertility is the most important factor in determining future population growth over the long run. A TFR of about 2.1 is needed to keep population stable over time. By 1995-2000 no less than 61 countries had fallen below this replacement level. Between them they housed 44 percent of the world’s population. Many developing countries had lower fertility than the United States – for example, China (with a TFR of 1.8), Thailand (1.74), Republic of Korea (1.65) and Cuba (1.55)2.
Some 23 countries had very low fertility rates, below 1.5 in 1995-2000. The average fertility rate for Western Europe was only 1.7, while in Eastern Europe it was 1.36. The lowest rates of all were found in Southern Europe, where Spain, Italy and Greece had rates below 1.3. Spain was lowest of all with 1.15.
Some 23 countries had very low fertility rates, below 1.5 in 1995-2000. The average fertility rate for Western Europe was only 1.7, while in Eastern Europe it was 1.36. The lowest rates of all were found in Southern Europe, where Spain, Italy and Greece had rates below 1.3. Spain was lowest of all with 1.15.
The 15-nation European Union reached a turning point in 2000 when the population's momentum flipped from positive to negative. The number of children dropped to a level that statistically assured there will be fewer parents in the next generation than there are in the current generation.
"The fact is, children cost too much." (Rafaele Lofiego, an Italian village bar owner)
Either the next generation of workers will have to pay unthinkably high levels of tax, or the current, relatively generous benefits will have to be radically scaled back.
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When will Europeans wake up to the implications of consistently low birth rates?
Well, in the words of one European professor of population studies, probably not until they are all in their wheelchairs and they suddenly realise there is no one left to push.
Either the next generation of workers will have to pay unthinkably high levels of tax, or the current, relatively generous benefits will have to be radically scaled back.
....
When will Europeans wake up to the implications of consistently low birth rates?
Well, in the words of one European professor of population studies, probably not until they are all in their wheelchairs and they suddenly realise there is no one left to push.
Alternative EU "exit from history" predictions?
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