From Nations to Provinces: The Demographic Collapse of Southern and Eastern Europe

Total fertility rates in Europe (children per woman), 2010. (Source: Eurostat)

My early political thought was in large part opposed to the “myth” of the demographic collapse of Europe, particularly as promoted by American neoconservatives and other Anglo-chauvinists, supposedly caused by spirit-killing effects of “liberalism” (welfarism-socialism), which, tied with Muslim immigration, would lead to “Eurabia.” These writers were taking a grain of truth, and as propagandists and vulgar polemicists are skilled at doing, turned this into an unadulterated fantasy pandering to the prejudices of their readers.

But there was a grain of truth. In whole swathes of Europe, entire nations, people have lost the will to reproduce themselves and/or are fleeing their country for prosperity elsewhere. This dramatic trend, which is affecting virtually all of Southern and Eastern Europe, will significantly change Europe’s internal balance of power and the continent’s relationship with the world. Italy, Portugal, Spain, Greece, Cyprus, Latvia, Lithuania, Hungary, Romania and virtually all of the Balkans are just some the “childless and jobless” countries which risk falling into econo-demographic death traps.

Even before the crisis, the populations of Latvia, Lithuania, Bulgaria and Romania were declining rapidly (their populations have shrunk between 4.8% and 13.7% since 2001). The euro crisis is aggravating and distorting these trends, causing a “baby recession” fertility drop and mass emigration (notably to Germany and emerging countries). Will this human hollowing-out of nations spread to the rest of Europe?

Fertility: A key underlying factor

The fertility rate is perhaps the most fundamental underlying variable: How many children does each woman have on average? Here we have a remarkable convergence between Teutonic Europe, Southern Europe, post-Communist Central Europe (including the Balkans), and post-Soviet Eastern Europe. Across the entire zone, women have between 1.2 and 1.6 children, with most hovering around 1.4, including Germany, Italy and Spain. Post-Soviet Europe (Russia, Ukraine, Belarus, Moldova…) is in a similar range, although the average is closer to 1.5.

The only countries with near-replacement level fertility (besides Turkey) are in the old liberal fringe: France, Belgium, Netherlands, Britain, Ireland and the Nordic countries – that is, the countries with strong indigenous modern democratic traditions (as opposed to countries where liberal democracy was either imposed by foreigners or is an imitation of foreign traditions).

For most of Europe, the fertility figures are really, really bad. We have these categories:

  • EU average 2010: 1.6
  • British Isles, Nordic countries, Belgium-Netherlands, France: 1.8-2.05
  • Teutonic Europe, Southern Europe, Central and Eastern Europe, Balkans, former Soviet Europe: 1.2-1.5
  • Russia: 1.6
  • Turkey: 2.05

It should be stressed that collapsing birthrates are a universal trend synonymous with “modernization” (especially urbanization and female education).

The global average fertility rate in 2010 was 2.45, while Europe and Central Asia’s was 1.81. East Asia’s fertility rate has now fallen below Europe’s while the fall is well underway in South Asia, Latin America, the Middle East and North Africa. The only region with still very high fertility is Sub-Saharan Africa (almost 5).

Europe’s fertility is pretty “normal” for the developed world. Compare the EU’s 2010 average (1.6) with American whites (1.7), Canada (1.59), China (1.55), Japan (1.39), South Korea (1.24), Taiwan (1.11) (sic!), Iran (1.86), Cuba (1.46), and City-States Hong Kong (1.11), Macau (0.93) and Singapore (0.79). Europe’s fertility is indeed in line with what is normal for developed countries, in fact it is significantly better than East Asia’s, but that doesn’t mean the trends within Europe are unremarkable or inconsequential. (Most figures from the CIA Factbook.)

Note: fertility rates can bounce back up (already seen in Bulgaria and Russia, from very low levels). But these divisions between low/moderate fertility European countries have been pretty stable for 30 years. Demographic decline is hard to reverse as, after a generation of low fertility, the new cohorts of women are much smaller, requiring very high fertility to reverse the trend.

Population change 2001-2012: Mostly economically-driven migration

This major underlying factor, fertility, is relatively weakly affected by economic circumstances. Although an economic collapse tends to lower fertility, and sometimes prosperity can increase it, the effect tends to be a relatively minor “nudging” of a more deep-seated, long-term tendency.

Economics mainly affects overall population through migration. Already, over the past decade and even before the crisis, we have seen significant divergences within Europe. We have four broad categories of changes in population size over the 2001-2012 period:

  • Collapse (-14% to -5%): Lithuania (-13.7%), Latvia (-13.6%), Bulgaria (-10.1%), Romania (-4.8%).
  • Aging stagnation (-5% to +4%): Hungary (-2.4%), Germany (-0.5%), Poland (0.7%), Portugal (2.8%), Greece (3.3%).
  • “Reasonable” growth (+4% to +10%): Belgium, France, Italy, Sweden, Britain, Netherlands (4.6%)
  • Speculative growth (+10% to +20%): Ireland (19.6%), Spain (14.1%), Luxembourg (19.5%)

These figures reflect both underlying fertility (as we’ve seen, very low everywhere except for France, Belgium-Netherlands, Nordics, and British Isles) and migration (from the poor to the prosperous).

The crisis is partially scrambling these categories: the “speculative” growth countries (Spain, Ireland) and the stagnant peripheral countries (Portugal, Greece) are returning their “normal” status as exporters of humans. Instead we have these categories:

  • “Reasonable”: moderate fertility, moderate-to-high immigration, middling-to-high economic growth (France, United Kingdom, Belgium-Netherlands, Nordics).
  • Childless but job-rich: low fertility, high immigration, growing economy (Germany, Austria).
  • Childless and jobless: low fertility, high emigration, either growing from poor base or developed but “peaked.” This concerns most of Europe: Poland, Spain, Portugal, Greece, Cyprus, Slovakia, the Baltic States, all of Eastern Europe except Russia, the Balkans…

“Childless and jobless Europe”: Entering the Demographic Death Trap

The “childless and emigrating” nations are perhaps the most interesting. They include both “depressed” post-communist Europe and the euro-crisis countries. Their demographic prospects are horrible.

The entire developed world faces the challenge of society’s ageing and in particular:

  1. Paying for ever-rising age-related expenditure, notably healthcare and pensions…
  2. …with an ever-shrinking base of young workers.

Obviously there are lots of other variables, for instance, the U.S. has a particularly irrational healthcare system (already absorbing an incredible 17% of GDP despite a relatively young population). However the underlying demographics and age-dependency ratios (the number of +65 year-olds to the number of working-age 15-64 year-olds) are perhaps the most critical factor.

Already between 1990 and 2010, the age-dependency ratio increased from 20.6 to 25.9% in the EU, including from 22 to 31.4% in Germany and from around 21.2 to 25.6% in France. Here are projections to 2060:

(Source: Eurostat)

In 2050, there will be only two working-age individuals (generously defined, as we include students) for every over-65 year-old. I do not believe these projections take into account the necessarily difficult-to-predict effects of the financial and euro crises.

The most extreme version of this phenomenon, among major nations, is Japan, which has both had extremely low fertility and low immigration. This, beyond disputes over this or that economic policy, is the ultimate cause of its so-called “lost decades” of economic stagnation. Already Japan has an old-age dependency ratio of 37% and the median age is 45.8. Japan today is roughly where the EU will be in 2030.

But Europe’s “childless and jobless” countries will get there much sooner. Low fertility in itself would doom them to Japanese stagnation, the fact in European countries of mass emigration of the young will accentuate this, meaning acceleration in the rise of the average age and in the age-dependency ratio.

Most Balkan and Baltic countries have largely failed to created viable autonomous economic models, Latvia, Lithuania, Bulgaria, Romania, Bulgaria have been largely emptying themselves of their populations, much like Caribbean countries. Poland, a success story today, does not look to have a good long-term future, although much depends on how much growth shale gas delivers and whether Polish emigrants (notably to the UK and Germany) plan on eventually returning home or not. One cannot over-generalize, there are reasonably successful intermediary nations, such as the Czech Republic and Estonia.

The Euro Crisis: From Nations to Provinces

The euro crisis will dramatically accentuate and accelerate these trends: fall in fertility, emigration (of the young and educated, “brain drain”), prolonged mass unemployment as wages are reduced without monetary devaluation (including hysteresis, loss of skills due to long-term unemployment), and cuts to infrastructure and educational investment (Mario Draghi recently repeated his call for both deficit reduction and lower taxes, implying the effort should be entirely through spending cuts). Between skill loss, brain drain, collapsed fertility and cuts to infrastructure and education investment, I think one should view with deep skepticism the claims that the “austerity medicine” will eventually help the peripheral nations to “recover,” even in the medium- to long-term.

It is difficult to estimate the effects of these factors taken together. Some preliminary developments to bear in mind going forward:

FAZ immigration

So far Southern Europeans have been less prone to leave their countries than their Eastern counterparts. But this may change as the economic and job situation fails to improve (although how bad things will be can vary significantly depending on whether Germany concedes a rational economic policy in the general interest of the eurozone as a whole, rather than just sticking to its own national interest, admittedly a tall order).

Like in Japan, we will see a rise in age-related expenditure and a dramatic decline in the working-age population across Southern and Central-Eastern Europe.

Japan, as a Nation-State, has an economic strategy and has, on balance, managed the consequences of its demographic “catastrophe” relatively well. In particular, Japan is a protectionist country which self-finances its (massive) public debt, protecting itself from financial market panic and international competition. The current experiment in “Abenomics” (devaluation, inflation, aggressive self-financing) is a classic example of decisive Nation-State action which will be followed with great interest.

In contrast, the peripheral European nations are no longer self-governing when it comes to macroeconomic policy. They have not been able to compensate for their demographic problems with sound and appropriate economic policy. On the contrary, EU authorities have, partly following the spirit of the European Treaties and partly bowing to the reality of German power, dramatically aggravated the situations of these countries. The peripheral nations face a “triple whammy” of inappropriate policies: crippling refinancing costs (because of lack of ECB/German solidarity, lack of inflation), the overvaluation of the euro, and automatic austerity (anti-Keynesian deficit reduction).

There is no indication these inappropriate policies will change except, perhaps and somewhat, refinancing costs (these have been lowered but remain high). The current situation benefits Germany and Berlin can veto any changes. This being the case, Berlin has overwhelming bargaining power, and so the German government has made temporary and circumstantial concessions (a bailout here and there) to get permanent and structural changes, notably on the banning of Keynesian deficit spending (Fiskalpakt, Six-Pack, Two-Pack), regardless of what future democratic majorities at national or EU level might want. This pattern will continue.

As a result, these inappropriate policies will not change. The peripheral countries may fall into permanent and self-reinforcing austerian vicious circles:

  1. Age-related costs rise and the workforce shrinks due to childlessness and emigration…
  2. …the government institutes tax hikes/budget cuts (usually respecting elderly voters), further undermining growth and crowding out investment…
  3. …age-related costs rise and the workforce shrinks due to childlessness and emigration…
  4. …and so on.

If things continue on their current paths, Spain, Portugal, Greece, the Balkans and most of Central-Eastern Europe will be transformed from living nations into hollowed-out provinces, gradually emptying themselves of their people under the twin pressures of emigration and loss of the will to reproduce. Falling under the domination of timid elderly voters, these gerontocracies and sell out their youth and their future, who will find their destiny in Germany, Britain or further beyond Europe. They will cling to the euro (guarantee of their pensions’ value) and “stability.”

Most of Southern and Central-Eastern Europe will likely be transformed into glorified retirement homes.  They will cease to be “nations” but become mere provinces of the Euro-German system (“Empire”), economically dependent on Germany and militarily and culturally dependent on America. They will cease to be autonomous socio-historical forces with their own life, but merely minor appendages to the Euro-German and American systems, providing very secondary markets and, it must be said, some much-appreciated labor for the German business-industrial complex.

This may be somewhat dangerous even for the center however: Spain, Italy and Greece may be so hollowed-out, elderly and impoverished that they may be too weak to even defend Europe’s borders and serve as viable buffer states for the Franco-German core. Already Greece is being overwhelmed as the “choke point” for immigration to Europe and, with the depths of the economic disaster there, we are seeing a sharp rise in violent racism and outright fascism.

Europe will be re-centered around four to five “true nations”: Germany, Britain, Turkey, Russia and, perhaps, France. (The destiny of France, critical to Europe’s future, remains as interesting and mysterious as ever, and one can imagine any number of scenarios.) The rest will be provinces. The only small or peripheral societies deserving the moniker “nation,” having a vibrant and autonomous life, will be the Nordics and perhaps half-a-dozen of the smaller continental countries.

It is interesting that Europe’s traditional dominant nations are maintaining themselves and remaining the only ones with any vitality, even in the strange, diffuse, difficult to seize postmodern age we live in. The euro will have accelerated and accentuated these processes – both the demographic collapse of certain parts of Europe and the decline of Europe in the world – while delaying the decline of Germany and allowing a partial renewal through (easy-to-integrate) European immigrants. However, in some places this classic peripheral decline is taking place without the euro and perhaps Spain, Portugal and Greece were doomed to decadence even without the folly of EMU. This “liberal decadence” is already inspiring counter-reaction, most notably in Viktor Orbán’s Hungary, although it’s not clear to me such reactionary revolutions will actually be able to address these trends.

Perhaps the enduring success of the major nations is due to their traditional power (the powerful make the rules to suit themselves, perpetuating that power). But I suspect it may also reflect deeper socio-cultural roots (national characteristics), which were the cause of their historical greatness in the modern age and persist in new forms to this day. The rest will become hollowed-out provinces, glorified retirement homes and, if they are pleasant enough, attractive tourist spots for global travelers to admire the ruins of once-proud nations.

***

The title of this post of course references the famous Irish patriotic song by Thomas Osborne Davis, “A Nation Once Again”. And as nothing is ever gained by defeatism, I’ll conclude on a more optimistic note:

When boyhood’s fire was in my blood

I read of ancient freemen,

For Greece and Rome who bravely stood,

Three Hundred Men and Three Men.

And then I prayed I yet might see

Our fetters rent in twain,

And Ireland, long a province, be

A Nation once again.

13 thoughts on “From Nations to Provinces: The Demographic Collapse of Southern and Eastern Europe

  1. Pingback: Seventeen Key Theses for the global fiscal-monetary mix - SNBCHF.COM

  2. Bogdan

    Interesting article, but I’m not sure I fully agree with the conclusions. For one thing I’m not entirely sure that depopulation equals economic disaster (in the end Europe is very densely populated at the moment and new technologies might make a large proportion of workers obsolete).

    But skipping that, I don’t think there is much of an argument for “strong indigenous modern democratic traditions” and fertility rate / population growth. I think that other factors (economics, government policies and/or culture) have more to do with this.

    Then there is the issue with the euro crisis helping to cause a “baby recession”. It might be true in most of the countries you mentioned, but in Romania, that statement doesn’t hold much water. Birth rate declined sharply after communism and remained at the same level for about 20 years (http://www.insse.ro/cms/files/publicatii/Evolutia%20natalitatii%20si%20fertilitatii%20in%20Romania_n.pdf). It’s not in English but check the chart on page 12. Also I suspect that emigration peaked in 2005 or 2007 – 2008 (again in Romania).

    In addition, as with mobility in Europe increasing, we may see some interesting reversals in the near future (you mentioned the recent case of Spain).

    The claim about “childless and jobless” is interesting, and indeed valid for a lot of countries. But I suspect that GDP/per capita might have a larger influence than unemployment figures. I’m going to refer again to Romania which although does not have a large unemployment problem, people are still leaving.

    And finally, with regard to Latvia, unemployment is high, people have , left the country, but it seems that the number of people employed has increased (albeit not by so much). http://ec.europa.eu/eures/main.jsp?lang=en&acro=lmi&catId=2776&countryId=LV&regionId=LV0&langChanged=true

    Nevertheless, Europe’s changing demographics is something that needs to be acknowledged and taken into account by policy makers. However I think that its to early to make predictions about depopulated countries on the fringes. Also I think that in the case of Central and Eastern Europe, the effect of the Euro Crisis is a bit overemphasized (in the case of Southern Europe and the Baltic it is much stronger).

    And finally, just something I though of right now: in the case of Belgium, France, Netherlands and British Iles, maybe part of their appeal to immigrants is the wider distribution of their languages and/or colonial + cultural ties. The Nordic Countries don’t fit in here, but they have low population density, good social security systems and …. well money basically.

    Reply
    1. craigjameswilly Post author

      Hey Bogdan,

      Interesting comments. Depopulation may be good environmentally but I think it is problematic economically, at least in the immediate, because it reduces growth (and hence makes debt-to-GDP harder to manage) and because of the old-age dependency ratio issue.

      As to the liberalism-fertility link, I was noting an interesting correlation, although I don’t know if there is causation. The cultural factors that led to liberalism in these countries may explain their relatively higher fertility today, although I don’t know.

      I was not implying the euro crisis was the primary factor across Europe, although it is an acutely aggravating one in Southern Europe. Indeed the euro’s dysfunctions may only be accentuating previous trends.

      Indeed, I say “childless and jobless” but in much of Europe “childless and poor(er)” would be more accurate.

      I agree one cannot make firm predictions, there are too many variables involved and revolutionary developments can occur. But I am trying to jolt people: If current trends continue, most of Europe will look like Japan very, very soon, without being able to compensate with appropriate economic policies. The “demographic death trap” is a real threat and I think the scenario I describe – of an impoverished and hollowed-out Europe ever-more dominated by a few remnant nations, the UK, Germany and France – is quite a plausible one if nothing is done. For the rulers and peoples of the periphery, there are in my view few examples of greater national disaster than for your nation, for all intents and purposes, to simply cease to “exist.”

      Reply
  3. Pingback: Brussels blog round-up for 11 – 17 May: France in recession again, ‘Schwabylon’, and how to become a British Eurosceptic. | EUROPP

  4. Pingback: From Nations to Provinces: The Demographic Collapse of Southern and Eastern Europe « Economics Info

  5. George Carty

    How do Europe’s TFRs look if one distinguishes between immigrants and native-born, or between Muslims and non-Muslims?

    Reply
    1. craigjameswilly Post author

      Hard to say given lack of stats. Minorities are probably not (yet) numerous enough to significantly alter the average. However, given their youth and low ethnic European fertility, big changes in population look set to happen.

      British fertility by ethnicity: http://iussp2009.princeton.edu/papers/93139 (p.5) Whites have about 1.7, Pakistanis and Bangladeshis have almost twice as much, although they have been falling from even higher levels.

      In France we have no ethnic statistics. But we know that foreign-born North African women in France have almost three children on average, 50% higher than the national mean.

      Reply
      1. George Carty

        Yes, but is the higher birth rates down to their being Muslims, or down to their being immigrants? White European immigrants to the United States had higher birth rates than native-born Americans as well.

        Incidentally, I expected the % Muslim in Andalucía to be considerably higher than its actually is. Although even with the demographics as they are, there are very strong pro-Palestinian sentiments there

        Reply
        1. craigjameswilly Post author

          Clearly both migration status and national origin play a role. European migrants to France have about as many children as native French, while Maghrebi migrants tend to have over 50% more children than the national average (more than in their home countries).

          Reply
  6. Pingback: Why aren’t people having babies? | Musings of an American expat

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>