Europe’s gray future

EU Observer looks at a new report, set to be endorsed by Europe’s finance ministers tomorrow, that looks beyond the the ramifications of the "Grexit" to a longer-term threat to the continent’s prosperity:

With an increase of some five percent, the total EU population is to reach 526 million in 2040. Not counted in the statistics are potential further enlargements to populous countries such as Turkey.

The largest chunk of the population will continue to be the age group 15-64, but it will decrease from 67 percent in 2010 to 56 percent in 2060. "Those aged 65 and over will become a much larger share (rising from 17% to 30% of the population), and those aged 80 and over (rising from 5% to 12%) will almost become as numerous as the young population in 2060," the report predicts.

The labour force is going to to up slightly until 2020 as more women are joining the workforce, but after that a decline of almost 12 percent will be recorded by 2060, or 27.7 million less.

Statistics vary widely across the bloc – from a 25 percent increase in Ireland to a 38.5 drop in Romania over the same period up to 2060.

As women across the bloc are having on average less than two children, which is the natural replacement rate for a society and as life expectancy is going up, the pensioner-to-worker ratio will rise from 39 percent in 2010 to 71 percent in 2060. The lowest rate – 55 percent – is projected in Denmark, the UK and Ireland, while the highest rates – over 90 percent are to be hit in Hungary, Slovakia, Poland and Romania in 2060.

Meanwhile, economic growth is projected to remain low, around 1.5 percent up to 2020 and 1.6 percent in 2021-2030 followed by a slow-down to 1.3 percent by 2060, as labour productivity will increase in the poorer states.

The aging of the developed world is the subtext of a lot of the generous maternity benefits I wrote about in this mother’s day list and the fertility promotion programs I discussed in the Sex Issue. Singapore’s government matchmaking service and Russia "Give Birth to a Patriot on Russia Day" contest might seem goofy, but there demographic trends behind them are a quite real