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 weve 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:
- Paying for ever-rising age-related expenditure, notably healthcare and pensions…
- …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:
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:
- There has been no significant or consistent job creation in the “austerity success stories” Ireland, Latvia and Lithuania. Latvia and Lithuania have achieved lower unemployment solely by exiling over 10% of their population.
- Ireland and Spain will probably see a decline in their population roughly proportional to their “unreasonable” migration-driven pre-crisis speculative growth (typical of this absurdity: between 2001-06 over half of jobs created in the EU 15 were in Spain).
- Portugal has seen over 2% of its population flee the country over the past two years (240,000 people).
- Germany, in contrast, attracted almost a million immigrants last year, overwhelmingly Eastern and Southern Europeans.
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:
- Age-related costs rise and the workforce shrinks due to childlessness and emigration
- the government institutes tax hikes/budget cuts (usually respecting elderly voters), further undermining growth and crowding out investment
- age-related costs rise and the workforce shrinks due to childlessness and emigration
- 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 Europes 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 Orbáns Hungary, although its 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, Ill conclude on a more optimistic note:
When boyhoods 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.