Much has also been written about the consequences of this
population collapse for national economies and national pension funds, which
will inevitably lead to further recession and eventual collapse.
One of the basic questions to be answered is why is this
happening, why are whole nations choosing a path that will lead to economic
suicide? There are many answers to this question but the most obvious ones are
often overlooked because they are inconvenient truths. The now, almost global,
push for more and more access to contraception and abortion is central to the
population collapse and European Governments should take cognizance of this
before it is too late.
The following is the text of the Independent article.
Slowly but unsurely, Europe is facing up to population
trends that will sap long-run economic growth and force nations to choose
between cutting pensions and welfare benefits or paying higher taxes to
maintain them.
Some countries are getting an early taste of difficulties
that await Europe as the continent's baby boomers retire and, because of
flagging fertility rates, the average age of those left in the labour force
rises.
In France, trade unions are planning protests against modest
plans to rein in the country's pension funding gap of €14bn and rising.
Spain, pressed by the European Commission, is drawing up
reforms to tackle underfunding in its pension system that forced the government
to dip into the social security reserve fund last year.
"There's a recognition that something needs to be done,
and it's just a question of the pace at which they move," said Edward
Hugh, an economist and demographer in Barcelona.
Spain's pension plight is partly cyclical: more than 3
million workers have lost their jobs since the onset of recession and have
stopped paying into the pensions system.
Emigration is making the funding crunch worse. More than
half a million foreign workers - lured to Spain during the boom years - have
left since the start of 2010, while young Spaniards are moving abroad in droves
in search of jobs.
Spain, Portugal and Ireland all lost about 2pc of their
working-age adults between 2010 and the first quarter of 2013, said Marchel
Alexandrovich, an economist with Jefferies, an investment bank, in London.
In the medium term, he said, this raises the question of who
pays for pensions and age-related health care costs in countries that are
educating their youngsters only to see many of them emigrate and pay taxes
elsewhere.
"Without some corresponding system of fiscal transfers
(i.e. U.S.-style federal taxes), this is not a sustainable arrangement,"
Alexandrovich said in a note.
VICIOUS CIRCLES
Spain is also paying the price of a low fertility rate for
the past 25 years - a trend compounded by the recession - which is reducing the
number of entrants to the workforce.
The risk is that low fertility, high emigration and a
rapidly ageing labour force form a vicious economic circle.
"So even when the recession ends, the damage to some
euro area economies will be more permanent than may be commonly
recognised," Alexandrovich said.
With fewer workers having to pay for more retirees,
Spaniards who are braced for lower pensions will tend to save rather than
spend, holding back the recovery and thus further eroding the tax base, Hugh
fears.
"Since they're not going to get the kind of economic
recovery they're expecting, and since young people are leaving, they're going
to have to do even more pension reforms than they imagine," Hugh said.
Countries across Europe are feeling the demographic pinch.
Bulgaria's population has shrunk by 582,000 people in the
past 10 years to 7.3 million. In 1985 it was almost 9 million. The Baltic
states have also witnessed extensive emigration.
NOT ENOUGH BABIES
Many countries fall well short of the total fertility rate
(TFR) of 2.1 children that women need to bear to hold the population constant
in the absence of net migration.
The TFR in Hungary, Poland, Romania and Slovakia fell by
more than 30pc between 1990 and 2011. Hungary had a TFR of just 1.2 live births
per woman in 2011, with Poland and Romania at 1.3 - considered by demographers
to be the danger level.
Germany is already experiencing the fallout of a fertility
rate that has been far below replacement level for 30 years.
Across the 28-member European Union, Germany has the
smallest proportion of people in the 0-14 age bracket, the joint-highest
proportion of pensioners (with Italy) and the highest median age, according to
the European Commission.
Germany's domestic labour force fell by 70,000 in the past
year. Immigration is coming to the rescue for now - foreigners accounted for
all the employment growth in 2012, Alexandrovich said - but the country's
growth prospects are darkening.
The Organisation for Economic Cooperation and Development
reckons Germany's potential growth will fall to less than 1 percent a year
after 2020, from an already low 1.5pc today, due to population ageing.
By 2050 France and Britain, with much more favourable
demographic profiles, are projected to have bigger economies than Germany,
whose population is set to shrink to just over 70 million from nearly 82
million now.
The danger of intergenerational conflict as fewer workers
have to provide for more pensioners is a future risk, but adverse demographics
are already affecting parts of the economy.
Car sales in Germany are falling in part because an ageing
population drives less, exacerbating industry-wide overcapacity, according to
Douglas Roberts, an economist with Standard Life in Edinburgh.
"As with changing pension conditions, restructuring of
a major industry such as autos will be difficult and meet major resistance both
from unions and governments," he said.
More broadly, a shrinking workforce will make it harder to
meet future pensions - as Detroit has discovered - and to service the increased
public and private debt that Europe has racked up in recent decades, especially
since the recession.
The Commission's central projection is that EU employment
will fall by 5 million, or 2.5pc, between 2010 and 2030.
Rich economies will lose more than 1 percentage point of
annual growth in the decade 2012-2021, mainly due to the ageing of their
workforces, a 2012 Bank of Spain research paper found.
Not everyone is confident that Europe will rise to the
challenge and make its welfare states affordable.
"Age-related spending plus slow-to-negative growth in
labour forces will keep driving most developed nations toward bankruptcy until
they reform their governments and financial sectors," wrote Leigh Skene
with Lombard Street Research, a London consultancy.
The Economic & Social Research Institute (ESRI), Health Research
and Information Division, has issued its perinatal statistics report for 2012
for all babies born in Ireland in 2012.
