Sunday, January 18, 2015

Why the economic crisis could result in a disaster for Europe's demographics.

http://en.wikipedia.org/wiki/Ageing_of_Europe
During the past five years Europe and especially the southern part of it is gripped by an economic crisis. The immediate reaction of the continent's leadership, was to impose harsh austerity measures to tackle it and ensure the viability of the euro, plus the continent's banks.

Yet while they were quick to deal with any threat to the single currency and the potential losses for the European banking system, they seem very reluctant to do so for major social issues that arise from the austerity measures, that they have imposed on us.

Unemployment is high and salaries are slashed. Emigration from the worst hit economies to the more affluent regions of Europe is increasing, as people are getting desperate. And it is mainly the younger generation that emigrates, in order to build a future.

That leads not to just an inevitable brain drain, but also a new demographic problem. Demographics for the European continent have been quite gloomy for the past decades. After Japan, Europe's countries and especially those of the South and Eastern regions, are heading for the worse population decline.

That trend is the result of capitalism and a dramatic transformation of the European economy. Living in our continent may be easier than many other regions, but it is also very expensive and competitive.

We are encouraged by our governments to become consumers, by the constant bombardment of advertising and the creation of a lifestyle that is based on the accumulation of goods, property or services. Europe's industries have been outsourced to countries with cheaper labor costs, so that the multinational corporations could gain more.

That leaves very few low-skilled jobs in our continent, that are usually filled by immigrants. Besides, few Europeans would opt in making a career in such jobs, because they pay little and they offer no secure income or prestige.

As result, European youths must study for longer-well into their mid or late 20s-postponing the age of starting a family, in order to attain degrees that would allow them to have better career prospects. In addition the lifestyle in Europe and the West in general, is becoming more egocentric.

Young people are spoiled by choice and materialism, plus they certainly do not wish to start a family before the age of 30, or even later. The consumerist mentality that we have been embedded with, dictate for a university degree, a car, an apartment, travel the world and buy everything that we possible ever wanted, before we get married, start a family and be bogged down with responsibility.

This trend becomes even worse when finances are bad. European youths tend to stay longer with their parents, simply because they can not afford to live on their own or start a family. The economic crisis has made this certainly very evident in Greece and Spain, where even youths who had initially moved out of their parental homes, returned to live with their parents again due to unemployment.

Even when they decide to have a family, the fertility rates are falling across Europe too.The average child per European woman rate is around 1.59, as of 2009. That is one of the lowest in the world and it is almost sure that it will get even lower due to the economic crisis. People not only do not want large families anymore, but now they can't even afford to have children.

One would think that our leaders would recognize the potential  catastrophe that looms over Europe and act on it, as quickly as they did to save the euro. Wrong! Not only they have taken little measures to deal with the problem, but they chose to cut social security services that helped large families cope with the expenses, as part of the austerity measures.

And all that to make sure that the bond holders in Europe's banking system get their money back. No single currency, market or banking system should be above people, in fact they should serve their interests. The reason of their existence is to make people's lives easier, not make them suffer. It seems that in a capitalist system that is a utopia.

http://www.businessinsider.com/the-greek-crisis-is-about-demographics-2010-5?IR=T
Bringing Greece as example, the forecast looks rather gloomy. According to one of the country's leading newspapers-Kathimerini- Greece's population declined by approximately 60,000 in 2013, mainly due to the economic crisis. The deaths for the first time surpassed the births by 16,300 people and 44,200 more individuals decided to emigrate out of the country than those who entered in Greece. (The article in Greek is here)

It is evident that the crisis has made the demographic problem of the country even worse and no solution has been offered by the Troika, or Greece's European partners. The utmost important issue to them is to save the euro.

Across the Southern region of Europe, just like in the Eastern part after the collapse of Communism, people are getting poorer and many kids are forced to leave their education plans, because their parents can not afford them. The crisis takes young people out of schools and throws them in a future with no jobs or forced emigration.

And since immigration into Europe is also increasing from other war torn, or poverty plagued regions of the world, poor Europeans are faced with a very harsh future prospect. They will have to compete in their own country with immigrants, bringing the two communities in an inevitable clash.

http://www.businessinsider.com/the-greek-crisis-is-about-demographics-2010-5?IR=T
The signs are already visible. Europe is becoming more intolerant, xenophobic and is turning against its very European values or dream. Far-right or nationalist parties are mushrooming all over the continent and they are gaining popularity fast.

Under such developments the continent's leadership seem to be paralyzed and unable to deal with the problem.

They prefer to leave the issue to the next government to solve, but by then it will probably be too late. Europe is aging fast and in the future there just won't be enough young people to work, to sustain the ever increasing number of pensioners. Our continent will simply not have enough workers to tax and pay for the elderly.

A fast solution would be more immigration, but with the recent economic developments across the continent, that will also lead to a worsening backlash. Europeans are afraid of the loss of their national identity, or the so called "Islamization"  of Europe. Higher immigration rates in a short period of time, will only aggravate the continent's xenophobia.

It will be too easy to look at countries that took certain steps towards a solution, with good or medium results. But our governments are too short-sighted. The Scandinavian countries or others such as France, could offer some insight.

Necessary measures do not include more cuts in social security measures, but in fact an increase of support for young families. France pays mothers for up to 3 years parental leave and a monthly cash incentive, which is nearly the minimum wage for a mother to stay off work, for one year following the birth of her third child.

Plus it has developed an income tax system, based on the more children the less tax to pay and government subsidized daycare for children under the age of three, and full time school places for over threes paid for by the government. (BBC)

That has made France into one of the European countries with the highest birth rates. In Scandinavia on the other hand, they give parental leave to both parents to take in turn. Sweden’s family policy is aimed at supporting the dual-earner family model and ensuring the same rights and obligations, regarding family and work for both women and men.

Generous spending on family benefits, flexible leave and working hours for parents with young children and affordable, high-quality childcare are the main factors for success. The country's gender pay gap is also the lowest in Europe. (Europa.eu)

Under an EU led program, we could copy the above policies and promote them across Europe, especially to those countries in need. It is not just the recent crisis hit EU members like Greece, but also most of the former USSR democracies like the Baltic states, that face a gloomy demographic future.

So why isn't there an agreement on this, or a collective action or creation of a family oriented fund, to tackle Europe's demographic problems? If we do not act now, it will be too late. Just by 2050, our continent's population won't be able to support any growth in the economy.

So instead of wasting billions in trying to save the banks, why don't we make a much wiser investment that will prove far more necessary and crucial for our economy in the future; in our social security and child policies.

Europe must start investing in its youth, they are the future and they are the most valuable asset of the continent, than any market or currency. Without future workers, citizens, voters or consumers, the single market that the European elites are trying so hard to salvage to the detriment of social security policies, won't survive anyway.

If the future generations are poorer or unable to have children, then there will be no future for Europe. It is time that our continent changed its priorities and focus on policies that are more people and family oriented.

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